Why is Entergy (ETR) up 1.7% since its last earnings report?

It’s been a month since Entergy’s (ETR) last earnings report. Shares rose about 1.7% in that time, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Entergy facing 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 better understand the important catalysts.

Entergy lags first-quarter earnings estimates, with revenue declining year over year

Entergy Corporation reported first-quarter 2024 adjusted earnings of $1.08 per share, representing a decline of 25% that was in line with the Zacks Consensus Estimate of $1.44 per share. The bottom line also lagged the company’s reported earnings of $1.14 per share in the previous quarter, by 5.3%.

The company reported GAAP earnings per share of 35 cents, a significant decline from $1.47 per share in the year-ago quarter.

Revenues in the first quarter

Entergy reported revenues of $2.79 billion, missing 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 segments.

Segment results

Utility: Quarterly segment earnings were 91 cents per share, compared with $1.87 in the year-ago quarter.

Parent and others: The segment reported a loss of 56 cents per share, compared with a loss in the year-ago quarter of 41 cents.

Release highlights

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

Operating income was $238 million, down 48.5% from the $462.1 million reported in the same period last year.

Total interest expense was $267.2 million, an increase of 8.7% compared to $245.7 million recorded in the comparable period of 2022.

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

Selected financial data

As of March 31, 2024, Entergy had cash and cash equivalents of $1.29 billion compared to $132.5 million as of December 31, 2023.

Total long-term debt was $24.31 billion as of March 31, 2024, compared to $23.01 billion as of December 31, 2023.

As of March 31, 2024, ETR generated cash from operations of $521.1 million compared to $959.5 million in the year-ago period.

Conductivity

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

How have estimates changed since then?

Investors have witnessed an upward trend in estimate revisions over the last month.

As a result of these changes, the consensus estimate moved -5.21%.

VGM results

Right now, Entergy has an average Growth Score of C, but its Momentum Score is doing slightly better at B. Following the exact same trajectory, the stock was given a B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has a composite VGM score of B. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company show an upward trend, and the scale of this revision indicates a downward shift. Notably, Entergy carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Entergy is part of the Zacks Utility – Electric Power industry. Over the past month, shares of the same industry NextEra Energy (NEE) have gained 12.6%. More than a month ago, the company published its results for the quarter ended March 2024.

NextEra reported revenue of $5.73 billion in its most recently reported quarter, representing a year-over-year change of -14.7%. EPS of $0.91 for the same period compared to $0.84 a year ago.

For the current quarter, NextEra is expected to report earnings per share of $0.91, representing a change of +3.4% from the prior-year quarter. The Zacks Consensus Estimate has remained unchanged over the past 30 days.

The overall direction and magnitude of estimate revisions translates into a Zacks Rank #4 (Sell) for NextEra. The stock also has a VGM Rating of D.

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