Entergy (ETR) Down 36.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Entergy (ETR). Shares have lost about 36.1% in that time frame, underperforming the S&P 500.

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

Entergy Corp Q4 Earnings Beat Estimates, Sales Fall Y/Y

Entergy Corporation (NYSE:ETR) reported fourth-quarter 2018 adjusted earnings of 68 cents per share, which surpassed the Zacks Consensus Estimate of 66 cents by 3%. However, the reported figure decreased 2.85% from 70 cents registered in the year-ago quarter.

Excluding the effects of special items, the company reported GAAP earnings of $1.92 per share against the loss of 36 cents per share a year ago.

For 2019, the company reported adjusted earnings of $5.40 per share, which outpaced the Zacks Consensus Estimate of $5.37 by 0.36%. The bottom line also increased 2.1% from $5.29 in the prior year.

Total Revenues

In the quarter under review, total revenues came in at $2,462.3 million, which declined 2% from the year-ago quarter’s $2,512.5 million.

For 2019, the company’s total revenues amounted to $10.88 billion, which missed the Zacks Consensus Estimate of $11.17 billion by 2.6%. Further, the reported figure slipped 1.1% from the year-ago quarter’s $11 billion.

Segment Results

Utility: The segment’s quarterly adjusted earnings came in at $1.14 per share, in line with the prior-year quarter’s figure.

Parent & Other: The segment incurred adjusted loss of 46 cents per share compared with a loss of 44 cents in the prior-year quarter.

Entergy Wholesale Commodities (EWC): The segment’s quarterly reported earnings came in at $1.08 per share against a loss of $2.04 per share registered in the year-ago quarter.

Highlights of the Release

Operating expenses in the quarter summed $2.21 billion, down 19.2% from $2.74 billion in the year-ago quarter.

Operating income during the quarter totaled $248.5 million against the loss of $228.9 million in the year-ago quarter.

Interest expenses were $187.9 million, up 4.4% from $180 million in the year-ago quarter.

In the reported quarter, total retail customers served by the company increased 0.8% to nearly 2.92 million.

Financial Highlights

As of Dec 31, 2019, the company had cash and cash equivalents of $425.7 million compared with $481 million as of Dec 31, 2018.

Long-term debt was $17.1 billion at the end of the fourth quarter compared with $15.52 billion as of Dec 31, 2018.

At the end of 2019, the company generated cash from operating activities of $2.82 billion, down from $2.39 billion in the prior year.

Guidance

For 2020, Entergy expects its operational earnings to remain in the band of $5.45-$5.75 per share. The Zacks Consensus Estimate for the company’s earnings is currently pegged at $5.59, slightly lower than the midpoint of the company’s guided range.

How Have Estimates Been Moving Since Then?

Estimates revision followed a flat path over the past two months. The consensus estimate has shifted -5.33% due to these changes.

VGM Scores

At this time, Entergy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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

Entergy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.