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Why Is Entergy (ETR) Up 1.7% Since Last Earnings Report?

A month has gone by since the last earnings report for Entergy (ETR). Shares have added about 1.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Entergy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Entergy's Q1 Earnings Lag Estimates, Revenues Drop Y/Y

Entergy Corporation reported first-quarter 2024 adjusted earnings of $1.08 per share, which missed the Zacks Consensus Estimate of $1.44 per share by 25%. The bottom line also came in lower than the company’s prior-year quarter’s reported earnings of $1.14 per share by 5.3%.

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The company reported GAAP earnings per share of 35 cents, down significantly from the year-ago quarter’s level of $1.47 per share.

Q1 Revenues

Entergy reported revenues of $2.79 billion, which missed the Zacks Consensus Estimate of $3.18 billion by 12%. The figure also declined 6.3% from the $2.98 billion reported in the year-ago quarter due to lower revenues from all of its segments.

Segmental Results

Utility: The segment’s quarterly earnings were 91 cents per share compared with $1.87 in the prior-year quarter.

Parent & Other: The segment reported a loss of 56 cents per share compared with the year-ago quarter’s loss of 41 cents.

Highlights of the Release

Operating expenses totaled $2.56 billion, up 1.5% from $2.51 billion recorded in the prior-year quarter.

The operating income amounted to $238 million, down 48.5% from $462.1 million registered in the year-ago period.

Total interest expenses were $267.2 million, up 8.7% from $245.7 million reported in the comparable period of 2022.

As of Mar 31, 2024, the total retail customers served by the company increased 0.7% to 3.01 million.

Financial Highlights

As of Mar 31, 2024, Entergy had cash and cash equivalents of $1.29 billion compared with $132.5 million as of Dec 31, 2023.

Long-term debt totaled $24.31 billion as of Mar 31, 2024 compared with $23.01 billion as of Dec 31, 2023.

As of Mar 31, 2024, ETR generated cash from operating activities of $521.1 million compared with $959.5 million in the year-ago period.

Guidance

Entergy’s financial guidance for 2024 remains unchanged. The company still expects to generate adjusted earnings in the range of $7.05-$7.35 per share. The Zacks Consensus Estimate for ETR’s 2024 earnings is currently pegged at $7.22 per share, which is above the midpoint of the company’s guided range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted -5.21% due to these changes.

VGM Scores

At this time, Entergy has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Entergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Entergy is part of the Zacks Utility - Electric Power industry. Over the past month, NextEra Energy (NEE), a stock from the same industry, has gained 12.6%. The company reported its results for the quarter ended March 2024 more than a month ago.

NextEra reported revenues of $5.73 billion in the last reported quarter, representing a year-over-year change of -14.7%. EPS of $0.91 for the same period compares with $0.84 a year ago.

For the current quarter, NextEra is expected to post earnings of $0.91 per share, indicating a change of +3.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for NextEra. Also, the stock has a VGM Score of D.

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