News Release > Entergy reports first quarter earnings

Entergy reports first quarter earnings

04/26/2023

Company affirms guidance and outlooks

NEW ORLEANS – Entergy Corporation (NYSE: ETR) reported first quarter 2023 earnings per share of $1.47 on an as-reported basis and $1.14 on an adjusted basis (non-GAAP).

“We had a productive start to the year with strong execution on important operational and regulatory fronts,” said Drew Marsh, Entergy chairman and chief executive officer. “We have positioned ourselves well to deliver on our stakeholder commitments for 2023, and we are poised to capture both near- and long-term robust growth opportunities.”

Business highlights included the following:

• E-LA completed a $15 million project in Southwest Louisiana, upgrading transmission infrastructure to meet Entergy’s new resilience standards.
• E-TX and Monarch Energy signed a memorandum of understanding for E-TX to supply long-term renewable power to Monarch’s 500-megawatt green hydrogen electrolyzer project.
• E-TX broke ground on the Orange County Advanced Power Station.
• E-LA filed a request with the LPSC to approve projects totaling approximately 225 megawatts of new solar capacity.
• E-LA filed a proposal with the LPSC to add 3 gigawatts of renewable resources, in addition to the nearly 2.5 gigawatts already sought; the filing also seeks to streamline the regulatory review and certification process for these additions.
• E-MS filed its annual formula rate plan.
• E-MS celebrated 100 years of serving customers and communities.
• JUST Capital and CNBC named Entergy to the JUST 100 ranking.
• Business Facilities magazine named Entergy a top U.S. utility for the company’s commitment to economic development.
• The Women's Business Enterprise National Council named Entergy to its list of America's Top Corporations for Women's Business Enterprises. 

Calculations may differ due to rounding

Consolidated results

For first quarter 2023, the company reported earnings of $311 million, or $1.47 per share, on an as-reported basis, and earnings of $242 million, or $1.14 per share, on an adjusted basis. This compared to first quarter 2022 earnings of $276 million, or $1.36 per share, on an as-reported basis, and earnings of $269 million, or $1.32 per share, on an adjusted basis.

Summary discussions by business follow. Additional details, including information on OCF by business, are provided in Appendix A. An analysis of quarterly variances by business is provided in Appendix B.

Business segment results

Utility

For first quarter 2023, the Utility business reported earnings attributable to Entergy Corporation of $397 million, or $1.87 per share, on an as-reported basis and $329 million, or $1.55 per share, on an adjusted basis. This compared to first quarter 2022 earnings of $340 million, or $1.67 per share, on an as-reported and an adjusted basis. There were several drivers for the quarter’s results.

The company recorded the following as a result of receiving securitization proceeds at E-LA for the storm cost recovery in March 2023 (considered adjustments and excluded from adjusted earnings):

• a reduction in income tax expense as a result of securitization,
• the portion of carrying costs on storm expenditures not previously recorded,
• a reduction in other income to account for LURC’s 1% beneficial interest in the trust established as a part of the securitization, and
• amounts reserved to share the benefits from securitization with customers.

Other drivers included:

• the effect of regulatory actions across the operating companies;
• lower retail sales volume due to the impacts of weather;
• higher operating expenses, including depreciation expense and taxes other than income taxes; and
• higher interest expense.

Higher dividends on intercompany preferred investments (offset at Parent & Other and largely earnings neutral for consolidated results) was also a driver for the quarter.

On a per share basis, first quarter 2023 results reflected higher diluted average number of common shares outstanding.

Appendix C contains additional details on Utility operating and financial measures.

Parent & Other

For first quarter 2023, Parent & Other reported a loss attributable to Entergy Corporation of
$(86 million), or (41) cents per share, on an as-reported and an adjusted basis. This compared to a first quarter 2022 loss of $(64 million), or (31) cents per share, on an as-reported basis and $(71 million), or (35) cents per share, on an adjusted basis.

In 2022 the wind down of Entergy Wholesale Commodities was completed, and that business is no longer a reportable segment. Any remaining financial activity from EWC is now included in Parent & Other results. For comparability, EWC first quarter 2022 results are also included in Parent & Other ($0.04 in as-reported earnings per share). The shut down and sale of Palisades was the primary driver for the 2022 EWC variance.

Higher dividends on intercompany preferred investments (offset at Utility and largely earnings neutral for consolidated results) was also a driver for the quarter.

On a per share basis, first quarter 2023 results reflected higher diluted average number of common shares outstanding.

Earnings per share guidance

Entergy affirmed its 2023 adjusted EPS guidance range of $6.55 to $6.85. See webcast presentation for additional details.

The company has provided 2023 earnings guidance with regard to the non-GAAP measure of Entergy adjusted EPS. This measure excludes from the corresponding GAAP financial measure the effect of adjustments as described below under “Non-GAAP financial measures.” The company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify with a reasonable degree of confidence all of the adjustments that may occur during the period. Potential adjustments include the exclusion of regulatory charges related to outstanding regulatory complaints and significant income tax items.

Earnings teleconference

A teleconference will be held at 10:00 a.m. Central Time on Wednesday, April 26, 2023, to discuss Entergy’s quarterly earnings announcement and the company’s financial performance. The teleconference may be accessed by visiting Entergy’s website at www.entergy.com or by dialing 888-440-4149, conference ID 9024832, no more than 15 minutes prior to the start of the call. The webcast presentation is also being posted to Entergy’s website concurrent with this news release. A replay of the teleconference will be available on Entergy’s website at www.entergy.com and by telephone. The telephone replay will be available through May 3, 2023, by dialing 800-770-2030, conference ID 9024832.

Entergy is a Fortune 500 company that powers life for 3 million customers through our operating companies in Arkansas, Louisiana, Mississippi, and Texas. We’re investing in the reliability and resilience of the energy system while helping our region transition to cleaner, more efficient energy solutions. With roots in our communities for more than 100 years, Entergy is a nationally recognized leader in sustainability and corporate citizenship. Since 2018, we have delivered more than $100 million in economic benefits each year to local communities through philanthropy, volunteerism, and advocacy. Entergy is headquartered in New Orleans, Louisiana, and has approximately 12,000 employees.

Entergy Corporation’s common stock is listed on the New York Stock Exchange and NYSE Chicago under the symbol “ETR”.

Details regarding Entergy’s results of operations, regulatory proceedings, and other matters are available in this earnings release, a copy of which will be filed with the SEC, and the webcast presentation. Both documents are available on Entergy’s Investor Relations website at www.entergy.com/investors.

Entergy maintains a web page as part of its Investor Relations website, entitled Regulatory and other information, which provides investors with key updates on certain regulatory proceedings and important milestones on the execution of its strategy. While some of this information may be considered material information, investors should not rely exclusively on this page for all relevant company information.

For definitions of certain operating measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix E.

Non-GAAP financial measures

This news release contains non-GAAP financial measures, which are generally numerical measures of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Entergy has provided quantitative reconciliations within this news release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Entergy reports earnings using the non-GAAP measure of Entergy adjusted earnings, which excludes the effect of certain “adjustments.” In 2022, that included the removal of the Entergy Wholesale Commodities segment in light of the company’s exit from the merchant power business. Beginning in 2023, as a result of the successful exit from the merchant nuclear business, Entergy Wholesale Commodities is no longer a reportable segment and any remaining financial activity from that business will no longer be adjusted in its entirety from Entergy’s results (individual items could be considered for adjustment if they meet the necessary criteria). Adjustments are unusual or non-recurring items or events or other items or events that management believes do not reflect the ongoing business of Entergy, such as significant tax items, and other items such as certain costs, expenses, or other specified items. In addition to reporting GAAP consolidated earnings on a per share basis, Entergy reports its adjusted earnings on a per share basis. These per share measures represent the applicable earnings amount divided by the diluted average number of common shares outstanding for the period.

Management uses the non-GAAP financial measures of adjusted earnings and adjusted earnings per share for, among other things, financial planning and analysis; reporting financial results to the board of directors, employees, stockholders, analysts, and investors; and internal evaluation of financial performance. Entergy believes that these non-GAAP financial measures provide useful information to investors in evaluating the ongoing results of Entergy’s business, comparing period to period results, and comparing Entergy’s financial performance to the financial performance of other companies in the utility sector.

Other non-GAAP measures, including adjusted ROE; adjusted ROE, excluding affiliate preferred; gross liquidity; net liquidity; net liquidity, including storm escrows; debt to capital, excluding securitization debt; net debt to net capital, excluding securitization debt; parent debt to total debt, excluding securitization debt; and FFO to debt, excluding securitization debt, are measures Entergy uses internally for management and board discussions and to gauge the overall strength of its business. Entergy believes the above data provides useful information to investors in evaluating Entergy’s ongoing financial results and flexibility and assists investors in comparing Entergy’s credit and liquidity to the credit and liquidity of others in the utility sector. In addition, ROE is included on both an adjusted and an as reported basis. Metrics defined as “adjusted” exclude the effect of adjustments as defined above.

These non-GAAP financial measures reflect an additional way of viewing aspects of Entergy’s operations that, when viewed with Entergy’s GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting Entergy’s business. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. Investors are strongly encouraged to review Entergy’s consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Although certain of these measures are intended to assist investors in comparing Entergy’s performance to other companies in the utility sector, non-GAAP financial measures are not standardized; therefore, it might not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.

Cautionary note regarding forward-looking statements

In this news release, and from time to time, Entergy Corporation makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, statements regarding Entergy’s 2023 earnings guidance; current financial and operational outlooks; industrial load growth outlooks; statements regarding its climate transition and resilience plans, goals, beliefs, or expectations; and other statements of Entergy’s plans, beliefs, or expectations included in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Forward-looking statements are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q, and Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with (1) rate proceedings, formula rate plans, and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent or on the timeline anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with (1) realizing the benefits of its resilience plan, including impacts of the frequency and intensity of future storms and storm paths, as well as the pace of project completion and (2) efforts to remediate the effects of major storms and recover related restoration costs; (d) risks associated with operating nuclear facilities, including plant relicensing, operating, and regulatory costs and risks; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Entergy’s nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with executing on business strategies, including strategic transactions that Entergy or its subsidiaries may undertake and the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized; (h) impacts from terrorist attacks, geopolitical conflicts, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy’s business or operations, and/or other catastrophic events; (i) the direct and indirect impacts of the COVID-19 pandemic on Entergy and its customers; and (j) effects on Entergy or its customers of (1) changes in federal, state, or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental, or energy policies; (2) the effects of changes in commodity markets, capital markets, or economic conditions; and (3) the effects of technological change, including the costs, pace of development, and commercialization of new and emerging technologies.

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