10-QPeriod: Q3 FY2020

ENTERGY CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 4, 2020For Securities:ETR

Summary

Entergy Corporation's Q3 2020 filing highlights the company's resilience amidst the ongoing COVID-19 pandemic and the impact of significant weather events across its service territories. While facing decreased commercial and industrial sales due to the pandemic, Entergy Arkansas reported higher retail electric prices and lower operational expenses, leading to a slight increase in net income for the nine months. Entergy Louisiana experienced a net income decrease in the third quarter due to lower volumes and higher expenses, but reported an overall increase for the nine months, aided by an IRS settlement and higher retail electric prices. Both Entergy Mississippi and Entergy Texas saw increased net income for the nine months, driven by higher retail electric prices and expense management, although they also experienced volume declines. System Energy Resources, Inc. reported increased net income driven by revenue changes and favorable regulatory developments. The company's liquidity remains stable, supported by its credit facilities and capital investments in infrastructure, despite the economic headwinds.

Financial Highlights

45 data points
Beta

Revenue

$2.90B

Net Income

$525.70M

18.1% Net Margin

EPS (Diluted)

$1.29

Total Assets

$56.07B

Cash & Equivalents

$1.24B

Free Cash Flow

$921.86M

Financial Statements
Beta
Revenue$2.90B
Operating Expenses$2.13B
Operating Income$778.02M
Interest Expense$207.81M
Net Income$525.70M
EPS (Basic)$1.30
EPS (Diluted)$1.29
Shares Outstanding (Basic)400.44M
Shares Outstanding (Diluted)402.23M

Key Highlights

  • 1Entergy Arkansas experienced a decrease in operating revenues by $44 million in Q3 2020 compared to Q3 2019, primarily due to lower volume/weather, offset by a return of accumulated deferred income taxes.
  • 2Entergy Louisiana reported a net income decrease of $31.8 million in Q3 2020 compared to Q3 2019, primarily due to lower volume/weather and higher expenses, despite an increase in retail electric price.
  • 3Entergy Texas saw a significant increase in operating revenues by $52 million in Q3 2020 compared to Q3 2019, driven by higher sales for resale and the return of accumulated deferred income taxes, alongside a modest increase in retail electric price.
  • 4System Energy Resources, Inc. reported an increase in net income of $6 million in Q3 2020 compared to Q3 2019, primarily due to higher operating revenues resulting from rate base changes and a favorable resolution of a return on equity complaint.
  • 5Entergy Louisiana incurred significant restoration costs estimated between $1.25 billion to $1.4 billion due to Hurricane Laura, with recovery mechanisms subject to regulatory review.
  • 6Entergy Texas incurred storm spending of $40.9 million in 2020 for Hurricane Delta, with estimated restoration costs between $40 million to $50 million.
  • 7Entergy New Orleans experienced a decrease in net income of $5.5 million in Q3 2020 compared to Q3 2019, primarily due to lower volume/weather.

Frequently Asked Questions

The primary impact of COVID-19 was a decline in commercial and industrial sales across most of Entergy's subsidiaries, coupled with an increase in late customer payments. While the company has taken steps to mitigate these effects, including the suspension of service disconnections, the long-term financial impact remains uncertain.

Entergy Louisiana was significantly impacted by Hurricane Laura in August 2020, with estimated restoration costs between $1.25 billion and $1.4 billion. Entergy Texas also experienced damage from Hurricane Laura and Hurricane Delta, with estimated restoration costs of $40 million to $50 million for Hurricane Delta. Entergy New Orleans was impacted by Hurricane Zeta.

Several subsidiaries, including Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, reported increases in net income partially due to higher retail electric prices resulting from formula rate plan adjustments and other riders. Entergy Texas also saw increased revenues from transmission cost recovery factor riders.

System Energy Resources, Inc. is involved in significant regulatory proceedings related to return on equity and capital structure, as well as complaints concerning its Grand Gulf sale-leaseback renewal and uncertain tax positions. These proceedings could result in refunds or adjustments to rates, with decisions still pending from FERC.