NEW ORLEANS — Utility holding company Entergy Corp. said Thursday that it expects to post a first-quarter loss because of a financial impairment one of its nuclear plants and expenses from its proposed spinoff of its electric transmission business.
The company also lowered its profit guidance for 2012 because of the non-cash write-off and warm winter weather.
Entergy said Thursday it expected a loss of about 87 cents per share, compared with a year-ago profit in the first quarter of $1.38 per share. Minus the special items, Entergy said it would earn 43 cents per share.
Analysts surveyed by FactSet have forecast per-share earnings of $1.13 per share on revenue of $2.46 billion
Entergy said the accounting impairment was tied to actions by Vermont regulators that could shut down the Vermont Yankee nuclear generating plant. The 40-year-old plant has a renewed federal license, but its request for a new state certificate is pending following unsuccessful efforts by the state to shut it down.
Earlier this month, Entergy told federal regulators it will not shut down the plant in the next five years. A federal judge in January blocked Vermont’s attempt to close the plant when its initial 40-year license term expired March 31.
Entergy said Thursday that the impairment did not change its opinion of the economic value of the plant assuming operation through 2032, “nor does it impact the company’s continuing commitment to invest to assure safe operations of the plant.
The additional expenses disclosed by Entergy are tied to its plans to spin off its electric transmission business and merge it into ITC Holdings Corp., which operates power transmission lines in the Midwest. Entergy shareholders will receive about $1.78 billion in cash, and its stockholders will receive shares of a new company created by the combination of Novi, Mich.-based ITC and the Entergy business. Entergy shareholders will have a 50.1 percent stake in the new company.
The deal is expected to close in 2013.
Entergy lowered its 2012 profit guidance to a range of $4.85 to $5.65 per share. Its previous guidance was in a range of $5.40 to $6.20 per share.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info