Entergy Net Income Declines to About 88 Cents a Share

By Edward Klump and Jim Polson

Jan. 22 (Bloomberg) -- Entergy Corp., the second-largest U.S. operator of nuclear power plants, said fourth-quarter profit fell to about 88 cents a share from 96 cents a year earlier on higher costs.

The expenses included storm damage and the planned spinoff of six nuclear reactors, New Orleans-based Entergy said today in a preliminary earnings statement. Milder weather than a year earlier also reduced utility deliveries, Entergy said.

Entergy’s utilities supply power to about 2.7 million homes and businesses in Arkansas, Louisiana, Mississippi and Texas. Weather-driven demand for cooling in Louisiana fell 31 percent from a year earlier, according to data compiled by Bloomberg. Entergy also booked storm costs in the quarter that the Arkansas Court of Appeals refused to pass on to customers.

Per-share profit was about 98 cents a share excluding costs for the spinoff, Entergy said. On that basis, the company was expected to earn $1.04, the average of 14 analyst estimates compiled by Bloomberg.

Costs related to the Arkansas court ruling are included in the 98 cents of so-called operating earnings, spokeswoman Yolanda Pollard said today in a telephone interview.

Entergy said profit from its nuclear operations rose because of higher pricing and lower income taxes, without giving a figure.

Entergy owns and operates 11 nuclear reactors and manages a 12th in Nebraska. U.S. nuclear plants generated electricity in the quarter for as little as $18 a megawatt-hour, or 59 percent less than the cost for the most efficient natural-gas-fueled plants, according to Jeremy Sussman, an analyst at Natixis Bleichroeder Inc. in New York.

Enexus Spinoff

The company announced plans in November 2007 to spin off its six non-utility reactors, including those in New York, Massachusetts, Vermont and Michigan. The new entity was to be based in Jackson, Mississippi, and called Enexus Energy Corp. Entergy was to keep New Orleans as its home.

In October, Entergy said it was “uncertain whether or not financing fundamental to the spinoff transaction can be effected in the near-term.”

The earnings per-share estimates assume success for a previously announced remarketing of $500 million of Series A senior notes next month, Entergy said. Failure of the offer would increase the number of diluted shares, the company said. Entergy has said it plans to repurchase stock with the proceeds.

The earnings announcement was made before regular trading began on U.S. markets. Entergy fell 45 cents to $77.86 yesterday in New York Stock Exchange composite trading. The company is scheduled to release its full earnings report on Feb. 3.

Exelon Corp., based in Chicago, is the largest U.S. nuclear power-plant operator, with 17 reactors.

To contact the reporters on this story: Edward Klump in Houston at eklump@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net.