Entergy Halves 3Q Profit as Prices, Demand Slump

Hurt by low commodity prices and soft demand, power producer Entergy (NYSE:ETR) nearly halved its third-quarter profit on Monday and revealed sales sharply below Wall Street expectations.

The New Orleans-based company posted net earnings of $337.1 million, or $1.89 a share, down 46% compared with a year-earlier profit of $628.1 million, or $3.53.

Excluding one-time items, Entergy said it earned $1.95 a share, below average analyst estimates of $2.00 in a Thomson Reuters poll.

The company attributed much of the year-over-year earnings decline in its utility business to a positive IRS settlement in 2011, but 2012 earnings were also weighed down by an across-the-board decline in sales as prices and demand slumped.

Shares of Entergy fell more than 2% to $69.80 premarket on Monday.

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"While our near-term financial results and outlook continue to reflect the current low commodity price environment, we remained focused on managing all aspects of our business that we can control," Entergy CEO Wayne Leonard said in a statement.

Revenues were lower across its electric, natural gas and competitive businesses, with utility sales slipping on weaker volumes led by the effects of warmer weather and Hurricane Isaac.

Total sales fell to $2.9 billion from $3.4 billion a year ago, widely missing the Street’s view of $3.42 billion.

For the current year, the company reaffirmed its non-GAAP earnings guidance to a range of $4.85 to $5.65 a share, which is in line with average analyst estimates of $5.49.

The company was more upbeat on the upcoming year, with Entergy forecasting 2013 earnings in the range of $4.60 to $5.40 a share, bracketing the consensus’ $5.26 a share, with a compound annual net income growth rate from 2010 to 2014 of 6%.