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Utility Entergy reports better-than-expected quarter profit due to surge in electricity demand

Entergy, the U.S. electricity utility, beat analyst's estimates for third-quarter profits on Wednesday. This was due to higher retail sales and strong power demand.

Entergy shares have gained over 25% this year compared to the S&P utilities index, which has gained 13.6%.

The U.S. Energy Information Administration has predicted that power consumption will reach record levels in 2025 and in 2026. This is due to the surge in demand for electricity from AI and cryptocurrency centers, as well as an increase in usage at home and in business, especially in heating and transportation.

The extreme heat of summer also encouraged consumers to use more air conditioners and fridges, which boosted profits for utilities like Entergy.

Entergy of New Orleans, which supplies electricity to almost 3 million customers in Arkansas, Louisiana and Texas said that its weather-adjusted sales had increased by 4.4%. This was boosted by the higher use of residential and industrial class.

Entergy received approval from Texas in September for the construction of two natural gas power plants to meet the surge in demand for electricity. In August, its Louisiana unit was given the go-ahead for infrastructure related to Meta's data center in Richland Parish.

Entergy retail sales for the quarter reported rose to 37.124 gigawatt-hours, an increase of nearly 4% from a year ago.

Sales of industrial products grew 7.3% compared to 15,150 GWh one year ago.

The company has lowered its profit forecast for 2025 to between $3.85 to $3.95 a share, down from an earlier view of $3.75 - $3.95 a share. According to data compiled and analyzed by LSEG, analysts estimated a profit per share of $3.91.

LSEG data shows that Enterfy's adjusted profit per share was $1.53, compared to the analysts' average expectation of $1.45.

(source: Reuters)