Entergy Corp. (ETR) on Friday forecast earnings for the third quarter below the prior-year period as well as below analysts' estimates, citing one-time charges, milder-than-normal weather and higher expenses as well as tax rates.
The New Orleans, Louisiana-based utility forecast third-quarter as-reported earnings of about $1.26 per share and operational earnings of around $1.67 per share. This compares to as-reported earnings of $1.34 per share and operational earnings of $2.41 per share in the prior-year period.
On average, eleven analysts polled by Thomson-Reuters expect the company to report third-quarter earnings of $2.08 per share. Analysts' estimates typically exclude one-time items.
Entergy said that with the Vermont Yankee nuclear power station nearing shutdown and as a result of thew new cost estimate for decommissioning, it will record a charge of $0.37 per share as a special item in its third-quarter results.
Entergy also said that in the utility segment, volume increases were offset by milder-than-normal weather that reduced earnings by about $0.11 per share.
Further, Entergy Mississippi's agreement not to pursue recovery of its regulatory asset for new nuclear generation development costs resulted in charges of about $0.23 per share to operational earnings for the quarter.
However, Entergy noted that utility net revenue increased over the prior-year period due to rate actions and growth in weather-adjusted sales volume, primarily to industrial customers.
Overall, utility operational earnings were lower, driven by a higher effective income tax rate, higher non-fuel operation and maintenance expense and a charge due to the likely outcome of a regulatory proceeding.
At the Entergy Wholesale Commodities segment, operational earnings declined due to increased depreciation expense and a higher effective income tax rate on operational earnings. These items were partially offset by lower non-fuel operation and maintenance expense.
The "Parent & Other" segment results decreased in the quarter due to higher income tax expense.
Looking ahead to fiscal 2014, Entergy affirmed its outlook for operational earnings of $5.55 to $6.75. Street expects the company to report full-year earnings of $6.15 per share.
ETR closed Thursday's trading at $79.40, up $0.45 or 0.57 percent on a volume of 1.97 million shares. In Friday's pre-market activity, the stock is down $0.90 or 1.13 percent to $78.50.
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