Entergy Corporation (ETR) Earnings & Analysis

Latest quarter

Entergy reported third-quarter revenue of $4.4 billion, above the consensus estimate of $4.2 billion. Adjusted earnings per share were $1.98, also above the $1.71 consensus. Revenue rose from $3.8 billion a year earlier.

CFO Kimberly Fontan attributed the year-over-year adjusted earnings increase in part to warmer weather and sales growth. Even after adjusting for weather, she said residential and industrial sales grew, with data centers and primary metals contributing to industrial demand. Entergy’s total retail electricity sales rose 7.4% to 39,864 gigawatt-hours (GWh).

Entergy’s gross margin rose to 72.7% from 71.3%, while its operating margin increased to 33.9% from 29.4%. The company reported $2.2 billion in operating cash flow for the quarter. Free cash flow was −$491.9 million, compared with $244.1 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Andrew Marsh said Entergy Arkansas amended its service agreement with Google for an expansion of the West Memphis campus. He said Google would cover the new investment costs and its share of system costs, and that the expansion would increase expected Arkansas customer bill savings by at least $500 million. Entergy Arkansas requested approval for the contract, $600 million of battery storage investment and a solar power purchase agreement.

Beyond that agreement, Marsh said prospective projects outside the base plan included data center interest of 7 to 12 gigawatts and traditional industrial discussions for 3 to 5 gigawatts. He said those projects could convert into signed agreements within the next 24 months. CFO Kimberly Fontan told an analyst that industrial sales growth expectations for 2026 through 2030 had not changed, while year-over-year comparisons could vary as customers ramp up at different times.

Asked about customer bills in other jurisdictions, Marsh said Louisiana and Texas had resilience spending and traditional sales growth requiring generation and transmission investment. He said data centers were not covering all those costs and that the overall bill trajectory was around 4%.

Marsh said Entergy planned more than 1 thousand miles of transmission lines, primarily in Louisiana and Texas, with approximately 70% of the investment already approved. He also said an Arkansas rate-case settlement with staff would result in essentially no rate change, with a commission decision expected before year-end.

On financing, Fontan said Entergy had closed a second build-to-suit lease, for Louisiana’s Waterford 6 plant, to support credit and manage equity needs during construction. “For our 2027 through 2030 need, more than 40% is already contracted,” she said. In response to an analyst’s question, Fontan said private credit and other tools could expand investment capacity, with much of that activity likely to occur beyond the current outlook period.

Guidance

Entergy narrowed its FY2026 adjusted earnings guidance to $4.35 to $4.45 per share. CEO Andrew Marsh said the company raised the lower end by $0.10, citing results to date. CFO Kimberly Fontan said higher-than-planned retail sales had allowed Entergy to adjust spending in areas that benefit customers.