Oct. 15, 2012
/PRNewswire/ -- Entergy Corporation (NYSE: ETR) today indicated that it expects third quarter 2012 as-reported earnings of approximately
per share and operational earnings of approximately
per share. Results for third quarter 2011 were
per share on both an as-reported basis and an operational basis, which included significant benefits associated with a settlement with the Internal Revenue Service. Entergy also affirmed previously issued operational earnings guidance for 2012.
As-reported results are prepared in accordance with generally accepted accounting principles (GAAP) and are comprised of operational earnings (described below) and special items. The special item in the third quarter of 2012 was due to expenses recorded at the Utility arising out of the proposed spin-off and merger of Entergy's electric transmission business with ITC Holdings Corp.
The decrease in Utility third quarter 2012 operational earnings reflected substantially higher income tax expense than the prior year, which included the effect of the
IRS settlement significantly reducing income tax expense. Also contributing to lower results were higher non-fuel operation and maintenance expense and higher depreciation expense.
Partially offsetting these items was an increase in Utility net revenue. The improvement resulted in large part from the absence of the 2011 regulatory charge for customer sharing of the IRS settlement benefits, as well as other pricing adjustments. Retail billed sales volume was down quarter-over-quarter driven by the net effect of weather and Hurricane Isaac. Overall, weather in the current quarter was warmer-than-normal, but it fell short of the significantly warmer-than-normal temperatures experienced one year ago.
Entergy Wholesale Commodities
The quarter-over-quarter decrease in earnings at Entergy Wholesale Commodities was due to lower net revenue and higher non-fuel operation and maintenance expense. EWC net revenue declined due to lower pricing for the nuclear fleet. Also contributing was lower nuclear production due to more unplanned and refueling outages, which included one plant,
, at 15 refueling days in third quarter 2012 versus no refueling outages last year.
Partially offsetting these items were lower depreciation expense and a lower effective income tax rate at EWC. The decrease in depreciation expense was driven by the resolution of Indian Point Unit 2 litigation related to the Department of Energy's failure to provide timely spent fuel storage.