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Why Is Entergy Corporation (ETR) Up 3.09% Since Its Last Earnings Report?

It has been about a month since the last earnings report for Entergy Corporation ETR. Shares have added about 3.1% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is ETR 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 Q4 Earnings Top Estimates, Issues 18 View

Entergy reported fourth-quarter 2017 adjusted earnings of 76 cents per share, beating the Zacks Consensus Estimate of 42 cents by 81%. Moreover, the number improved 145.2% from the year-ago quarter’s figure of 31 cents.

On a GAAP basis, the company reported a loss of $2.66 per share compared with a loss of $9.88 a year ago. The difference between GAAP and operating earnings in the reported quarter was due to the effect of special items.

In 2017, Entergy reported adjusted earnings of $7.20 per share, beating the Zacks Consensus Estimate of $6.91 by 4.2%. Moreover, the number rose 1.3% from the year-ago figure of $7.11.

Segment Results

Utility, Parent & Other: The segment’s quarterly earnings were 41 cents per share compared with 35 cents in the prior-year quarter.

Entergy Wholesale Commodities (EWC): The segment reported operating earnings of 35 cents per share compared with loss of 4 cents in the year-ago quarter.

Highlights of the Release

Interest expenses were $662 million in 2017, down 0.6% from $666 million in the prior year.

In 2017, total retail customers served by the company increased 0.6% to nearly 2.9 million.

Financial Highlights

As of Dec 31, 2017, the company had cash and cash equivalents of $781 million compared with $1,188 million as of Dec 31, 2016.

Total debt, as of Dec 31, 2017, was $16.7 billion compared with $15.3 billion as of Dec 31, 2016.

For 2017, the company generated cash from operating activities of $2,624 million, down $2,999 million from the prior-year quarter.

Guidance

For 2018, Entergy issued operational earnings guidance per share in the band of $6.25-$6.85.

The Utility, Parent & Other adjusted earnings are expected in the range of $4.50-$4.90 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

Entergy Corporation Price and Consensus

 

Entergy Corporation Price and Consensus | Entergy Corporation Quote

VGM Scores

At this time, ETR has an average Growth Score of C, however its Momentum is doing a bit better with a B. The stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stocks 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.

Based on our scores, the stock is primarily suitable for value investors while also being suitable for those looking for momentum and to a lesser degree growth.

Outlook

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


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