Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Entergy Corp (ETR, Financial) reported strong adjusted earnings per share of $0.82 for the first quarter, keeping them on track for their 2025 guidance.
• The company announced significant industrial growth with new investments from Hyundai Motor Group, CF Industries, and Woodside, expected to boost economic development in Louisiana.
• Entergy Corp (ETR) is executing on its capital plan, with projects like the Orange County Advanced Power Station and Delta Blues Advanced Power Station on schedule and budget.
• The company received regulatory approvals for several key projects, including a $0.5 billion transmission project in Louisiana and a combined cycle gas plant in Mississippi.
• Entergy Corp (ETR) has secured its equity needs into 2027, ensuring access to capital needed to execute its capital plan.

Negative Points

• Higher interest expenses and depreciation due to investments partially offset the favorable effects of higher retail sales volume.
• The company faces potential impacts from tariffs, which could affect capital expenditures, though they estimate the impact to be approximately 1% of their $37 billion, four-year capital plan.
• There is macroeconomic uncertainty that might weigh on industrial activity, although Entergy Corp (ETR) remains optimistic about long-term growth.
• The timing of new customer ramps and potential volatility in sales could affect the company's financial performance.
• Entergy Corp (ETR) is managing potential risks related to the availability and transferability of renewable tax credits, which could impact their financial outlook.

Q & A Highlights

Q: With the Arkansas generation bill, do you feel the state is now fully competitive on the data center front, and have there been any inbounds thus far? A: Andrew Marsh, CEO: We feel that Arkansas is fully competitive now, and we are in discussions with potential customers. There is significant interest in the state.

Q: Regarding the financing updates, does the acceleration of equity imply an improvement in credit metrics or other changes? A: Kimberly Fontan, CFO: There hasn't been a significant change in the timing of equity needs. We contracted forward into 2027, and our credit metrics through 2028 continue to build towards 15%. The forward volume in Q1 was about taking risk off the table amid volatility.

Q: Can you discuss the drivers behind the residential sales increase and any macro factors affecting industrial activity? A: Kimberly Fontan, CFO: Residential sales are expected to grow about 1% for the full year, with overall sales at 5.5%. Industrial sales have shown over 5% growth for 15 years, and recent customer announcements underscore ongoing opportunities despite macro uncertainties.

Q: How quickly can you offer service to new large load customers, and what is the tariff exposure's impact on earnings? A: Andrew Marsh, CEO: We have queue positions to provide generation, with opportunities for customers in the 2028-2029 timeframe. Kimberly Fontan, CFO: Most tariff exposure is tied to new generation components in 2027-2028, giving us time to mitigate impacts, so we don't see a significant earnings effect.

Q: Are you trending higher in the fiscal 2025 plan given the strong start, and what about the potential for settling issues in the new customer generation transmission filing? A: Kimberly Fontan, CFO: We had a good start, but we use that flexibility to manage business uncertainty. We are comfortable with our outlooks. Andrew Marsh, CEO: There is potential to settle, and we prefer that, but we are confident in managing the process for a beneficial outcome.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.