10-QPeriod: Q3 FY2019

ENTERGY CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2019

Filed November 5, 2019For Securities:ETR

Summary

Entergy Corporation's Q3 2019 filing indicates mixed performance across its subsidiaries. Entergy Arkansas reported an increase in net income for the third quarter driven by higher retail electric prices and volume/weather, though nine-month results were impacted by higher operational expenses. Entergy Louisiana saw a strong increase in net income for both the quarter and nine months, primarily due to higher retail electric prices, partially offset by increased operating and interest expenses. Entergy Mississippi experienced a net income increase in the third quarter but a decrease for the nine-month period, with results impacted by pricing, volume, and operational costs. Entergy New Orleans reported a net income increase for the third quarter due to higher volume/weather, but a decrease for the nine-month period driven by higher operating expenses. Entergy Texas showed a net income increase for both periods, driven by higher prices, volume, and other income, despite increased operational and depreciation expenses. Overall, the company is managing its capital structure, with several subsidiaries issuing new debt to fund capital investments, including significant projects like new power stations and grid enhancements. The company is also navigating various regulatory proceedings, including rate adjustments, environmental compliance, and investigations into past practices, which could impact future earnings. Investors should monitor the outcomes of these regulatory and legal matters, alongside the company's ongoing capital expenditure plans.

Financial Highlights

44 data points
Beta

Revenue

$3.14B

Net Income

$369.46M

11.8% Net Margin

EPS (Diluted)

$0.91

Total Assets

$50.51B

Cash & Equivalents

$955.83M

Free Cash Flow

$1.06B

Financial Statements
Beta
Revenue$3.14B
Operating Expenses$2.62B
Operating Income$519.93M
Interest Expense$201.41M
Net Income$369.46M
EPS (Basic)$0.92
EPS (Diluted)$0.91
Shares Outstanding (Basic)397.86M
Shares Outstanding (Diluted)400.99M

Key Highlights

  • 1Entergy Arkansas reported a $20.8 million increase in net income for Q3 2019 compared to Q3 2018, primarily due to higher retail electric price and volume/weather.
  • 2Entergy Louisiana reported a $37 million increase in net income for Q3 2019 compared to Q3 2018, mainly driven by higher retail electric price and volume/weather.
  • 3Entergy Texas's net income increased by $7.4 million in Q3 2019 compared to Q3 2018, attributed to higher retail electric price, volume/weather, and other income.
  • 4Entergy Mississippi's net income increased by $5.5 million in Q3 2019 compared to Q3 2018, driven by higher retail electric price and volume/weather.
  • 5Entergy New Orleans' net income increased by $3.5 million in Q3 2019 compared to Q3 2018, primarily due to higher volume/weather.
  • 6Entergy Arkansas plans capital investments of $2.5 billion for 2020-2022.
  • 7Entergy Louisiana plans capital investments of $4.4 billion for 2020-2022.
  • 8Entergy Texas plans capital investments of $1.8 billion for 2020-2022.
  • 9System Energy Resources, Inc. reported an increase in net income for both the third quarter and nine months due to a lower effective income tax rate and changes in rate base.

Frequently Asked Questions

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas all reported increases in net income for Q3 2019 compared to Q3 2018. The primary drivers were higher retail electric prices and favorable volume/weather conditions. Entergy New Orleans also saw an increase driven by higher volume/weather, though overall nine-month performance for this subsidiary was impacted by higher operating expenses.

Entergy's subsidiaries have substantial capital investment plans for the upcoming years. Entergy Arkansas anticipates $2.5 billion in investments from 2020-2022, Entergy Louisiana plans $4.4 billion, and Entergy Texas expects $1.8 billion over the same period. These investments are directed towards transmission and distribution upgrades, new generation projects, and system improvements.

Yes, the filing indicates several ongoing regulatory and legal matters. For instance, Entergy Mississippi is involved in a dispute regarding fuel adjustment clause filings, and Entergy New Orleans is facing potential fines related to distribution system reliability and is involved in a complex legal challenge concerning the New Orleans Power Station construction. System Energy Resources is engaged in proceedings regarding its return on equity and capital structure. These matters could have financial implications for the company.

The Tax Cuts and Jobs Act has led to the return of excess accumulated deferred income taxes to customers across several Entergy subsidiaries, which reduces operating revenues but is offset by a corresponding reduction in income tax expense. The specific impacts and the timing of these returns vary by subsidiary.