DOW JONES NEWSWIRES
Entergy Corp.'s (ETR) fourth-quarter net income fell 12% as the
New Orleans-based power producer saw a drop in power usage,
particularly from industrial customers.
The company also projected 2009 earnings of $6.70 to $7.30.
Analysts on average expected $7.27, according to a survey by
Thomson Reuters.
The slumping demand and weak economy are forcing power providers
to cut capital spending and take other measures to boost liquidity.
Utilities are vulnerable to changes in demand as they base their
rates with the expectation that energy sales will rise gently. When
sales fall short, it is difficult for them to cover fixed costs and
reach authorized rates of return.
But Entergy said Tuesday it secured a $1.175 billion credit
facility for its planned spin-off of its five nuclear power plants
into a separate company. Entergy had been looking to raise $4.5
billion for the effort, but warned in October that it was uncertain
if the necessary financing would be available. Analysts, too, had
questioned whether Entergy could raise the cash, underscoring how
the credit turmoil is affecting the power industry.
Meanwhile, the company posted fourth-quarter net income of
$170.6 million, or 89 cents a share, down from $193.9 million, or
96 cents a share, a year earlier. Excluding undisclosed items,
earnings slid to 99 cents from $1.12. Two weeks ago the company
projected 98 cents, below analysts' then-expectations.
Revenue increased 9.8% to $3 billion. Analysts projected$2.91
billion.
Operating margin edged up to 82.5% from 82.1%.
Entergy's businesses consist of regulated utilities in the
Southeast and a fleet of power plants in mostly deregulated states
that sell electricity at market prices.
Residential electricity sales rose 0.2% on a weather-adjusted
basis while commercial and government sales slipped 0.5%.
Industrial sales slumped 11% as hurricane outages in September
pushed down October sales.
As such, the company's utility segment, Entergy's largest, swung
to a loss while profits in the nuclear business jumped 60%.
Shares of Entergy closed Monday at $73.38 and there was no
premarket trading.
-By Katherine Wegert, Dow Jones Newswires; 201-938-5400;
katherine.wegert@dowjones.com
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