Entergy Q2 Earnings Call Highlights

Key Points

• Entergy reported second-quarter adjusted earnings of $1.03 per share and reaffirmed its 2026 earnings guidance and long-term outlook through 2030. Industrial sales rose 10% excluding weather effects, although higher operating, financing and other costs pressured results.
• Demand growth remains strong, led by hyperscale data centers and industrial customers, with potential pipeline demand of 7–12 gigawatts and 3–5 gigawatts, respectively. Entergy’s “Fair Share Plus” policy requires data centers to cover their service costs and contribute to fixed system costs, with signed agreements expected to provide $7 billion in customer bill benefits.
• Entergy is expanding its capital program through resilience upgrades, more than 1,000 miles of transmission and potential generation additions. About 60% of its five-year equity plan is contracted through 2028, while the company continues pursuing the Cottonwood plant acquisition and evaluating new nuclear development.

Entergy NYSE: ETR reported second-quarter adjusted earnings of $1.03 per share and said it remains on track to meet its 2026 adjusted earnings guidance and longer-term outlook through 2030.

Chair and CEO Drew Marsh said the utility’s growth outlook continues to be supported by demand from technology-sector customers, traditional industrial customers and broader economic development across its four-state Gulf South service territory. While technology customers represent the largest contributor to demand growth in Entergy’s five-year plan, Marsh said the company continues to see substantial interest from industrial segments.

Entergy’s pipeline includes potential demand of 7 gigawatts to 12 gigawatts from hyperscale data centers, along with 3 gigawatts to 5 gigawatts of interest from traditional industrial customers. Marsh said interest in large-scale projects has continued to increase since the company’s Investor Day, though he noted that much of the newest activity remains at the indication-of-interest stage rather than fully developed proposals.

Data Center Growth and Customer Protections

Management emphasized its “Fair Share Plus” pledge, under which data center customers are expected to pay their full cost to be served as well as an appropriate share of fixed system costs. Marsh said agreements signed so far are expected to produce $7 billion in customer bill benefits.

Marsh pointed to Louisiana Gov. Jeff Landry’s executive order, signed in late June, as support for this approach. The order requires new data centers seeking state sales-tax exemptions to demonstrate customer protections, grid-resilience and reliability investments, meaningful community benefits and transparency. Marsh said the state cited Meta’s investment in Richland Parish as an example meeting those standards.

During the question-and-answer session, Marsh said data center development continues to receive strong support in Louisiana, Mississippi and Arkansas, though he acknowledged that concerns have arisen in some communities. New Orleans currently has a moratorium on data centers, he said, and Entergy expects to work with the city to address its concerns and seek to lift the restriction.

In Mississippi, Marsh said AWS already has a significant investment and AVAIO is also considering an investment. He added that Entergy is seeing interest from additional potential customers but did not provide specific details. Asked about reports that Meta could expand substantially in Louisiana, Marsh said he could not comment on Meta’s specific plans but said existing customers have expressed interest in expanding beyond their current commitments.

Resilience and Reliability Investments

Entergy said two minor tropical storms affected its service area during the first half of the year, but restoration costs were nominal and did not require special cost recovery. Marsh said the company’s year-round preparedness efforts include training, grid investments, inventory management, vegetation management and proactive maintenance.

In Louisiana, Entergy has begun a St. Bernard Parish project under its phase I accelerated resilience program. The work includes replacing or reinforcing about 640 distribution and transmission poles with equipment designed to withstand winds of up to 150 miles per hour.

The company also said its self-healing network program, which began installations in 2021, now includes more than 400 networks serving over 500,000 customers. According to Marsh, the program has avoided more than 700,000 customer interruptions and an estimated 80 million outage minutes since its launch.

Entergy Louisiana plans to file in the third quarter for a smaller intermediate resilience program, called phase I-A, intended to bridge the current program and a future phase while maintaining workforce continuity and managing customer affordability. In addition, Louisiana implemented a rider in May for enhanced vegetation-management spending above the 2025 baseline level.

Entergy Texas closed on a $200 million Texas Energy Fund grant in June, bringing its accelerated resilience plan to $337 million. Marsh said such investments are intended to strengthen storm readiness, harden the electric system and support faster restoration after severe weather.

Financial Outlook and Capital Plan

CFO Kimberly Fontan said second-quarter adjusted earnings were slightly below the prior-year period because weather was closer to normal, compared with warmer weather in 2025. Excluding weather, retail sales grew, driven by 10% industrial sales growth as new and expanding projects increased operations.

Fontan said earnings also benefited from customer investments and related regulatory actions, net of higher depreciation, taxes other than income taxes and financing costs. Other factors included higher operations and maintenance expense, higher interest expense to the parent company and a higher share count following the settlement of equity forwards.

The company reaffirmed its 2026 adjusted EPS guidance and outlook through 2030. Fontan said Entergy expects third-quarter operations and maintenance expense to be about $0.05 to $0.10 higher than in the year-earlier quarter, largely reflecting expenses recovered through riders and consideration related to the sale of its local distribution company business last year. Assuming normal weather, she said most of the year-over-year earnings increase is expected in the fourth quarter.

Entergy’s equity plan remains unchanged from Investor Day. The company completed a $2.175 billion equity-forward offering in early May, with about 60% of its five-year equity plan contracted through 2028. On June 22, Entergy settled 8.7 million shares of equity forwards for net proceeds of $672 million, which Fontan said will support the investment plan and credit profile.

Regulatory, Generation and Transmission Developments

Entergy Texas updated its distribution cost recovery factor and received approval for its first capacity cost recovery rider. Entergy Arkansas implemented new rates for its Generating Arkansas Jobs Act rider and filed a historical netting adjustment that reflects a customer rate reduction, partially offsetting its base-rate case impact. Entergy Mississippi’s annual formula rate plan filing was approved with no rate change.

Entergy Louisiana and Entergy New Orleans filed annual formula rate plan updates and requested extensions of their existing plans. Marsh said Entergy expects new rates in those jurisdictions to take effect in September, while adding that the company has a history of formula-rate-plan extensions in Louisiana.

On generation, Marsh said Entergy is continuing discussions with state officials and other parties regarding possible new nuclear development, including efforts to manage risks for customers and operating-company balance sheets. He said the company has made progress but does not yet have a timeline for an announcement, emphasizing that any project must be customer-led.

Entergy also continues to pursue its proposed acquisition of the Cottonwood generating plant. Marsh described the facility as the most economic option for serving expected growth from steel mills, LNG facilities and petrochemical customers in Louisiana, compared with building a new plant that may not be available until early next decade. The company is working with stakeholders on ways to mitigate near-term customer bill impacts.

Finally, management said Entergy is building more than 1,000 miles of transmission to support new customers and resilience needs. Fontan said the company has about 7.5 gigawatts of power-island equipment under contract or exclusivity arrangements, supporting the lower end of its 10-gigawatt to 17-gigawatt opportunity range.

About Entergy (NYSE:ETR)

Entergy Corporation NYSE: ETR is an integrated energy company headquartered in New Orleans, Louisiana, that generates, transmits and distributes electricity. The company's operations combine regulated utility services with competitive power production, supplying retail electricity to residential, commercial and industrial customers while also participating in wholesale energy markets. Entergy's generation fleet includes nuclear, natural gas, hydropower and other resources, and it operates a network of transmission and distribution assets to deliver power to end users.

Entergy conducts its regulated utility business through state-based operating subsidiaries that serve customers across parts of Arkansas, Louisiana, Mississippi and southeast Texas.

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