Entergy(US:ETR)2024-10-31 21:31Financial Data and Key Metrics Changes - The company reported an adjusted EPS of $2.99 for Q3 2024, raising the bottom of the guidance range by $0.10 due to strong results and a new capital investment plan [7][53]. - Operating cash flow increased to nearly $1.6 billion, up $157 million from the previous year, driven by timing of fuel and purchase power payments [56]. - The company expects a 6% dividend increase and a 2-for-1 stock split effective December 13, 2024 [65][66]. Business Line Data and Key Metrics Changes - Industrial sales growth is projected at a compound annual growth rate of 11% to 12% through 2028, primarily due to a new customer in Louisiana [8]. - Weather-adjusted retail sales growth was 5%, with industrial sales increasing by 10% [55]. Market Data and Key Metrics Changes - The company is seeing strong customer interest in renewable energy products, including green tariffs and nuclear clean tariffs, to support decarbonization goals [9]. - The preliminary capital plan through 2028 has increased by $7 billion, driven by new transmission and generation investments, including renewables [10][60]. Company Strategy and Development Direction - The company is focused on a significant capital investment plan to support customer requirements and growth in industrial sales [6]. - Entergy is actively exploring new nuclear options and evaluating potential power upgrades at existing facilities, aiming for a total of up to 300 megawatts [18][19]. - The company is committed to carbon capture and storage (CCS) technologies to comply with future federal emissions requirements and support customer decarbonization objectives [15][17]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential driven by macro trends such as onshoring clean energy and electrification [30]. - The company has developed and refined storm preparedness plans, resulting in effective responses to hurricanes with minimal injuries and quick power restoration [31][32]. Other Important Information - The company has received regulatory approvals for several resilience investments, including a $1.9 billion accelerated resilience plan in Louisiana [36][44]. - Entergy Louisiana submitted a request for approval of transmission and generation investments to support a new customer, with a decision expected by September 2025 [22][23]. Q&A Session Summary Question: What drove the major change in the 2026 EPS growth outlook? - Management indicated that the step-up in EPS growth is supported by incremental capital for significant customer growth, with a substantial amount already baked into the plan [71]. Question: Is the investment for the new customer fully covered under the rate agreement? - Management confirmed that investments are expected to be fully recoverable under existing rate mechanisms, with the new customer covering their marginal costs [73][74]. Question: How sustainable is the 8% to 9% EPS growth rate beyond 2026? - Management highlighted that various drivers, including clean energy and electrification, are expected to support sustainable growth into the next decade [82]. Question: What is the company's approach to developing new nuclear projects? - Management emphasized the importance of stakeholder engagement and the need for customer support to manage risks associated with large capital projects like nuclear [115][116]. Question: Will the capital expenditures from the new large customer be reflected in the update? - Management confirmed that all potential capital expenditures from the new customer are included in the current update [124].