While many energy companies have been cowering behind ugly third quarter financial results, Entergy Corp. on Wednesday stood out in the crowd with substantially higher earnings. In fact, operational earnings per share were up 21%, setting a new company record for third quarter.

Net income rose 16% to $360.9 million ($1.59/share) from $312.5 million ($1.39) on higher utility power sales (up 4.2%) and non-utility nuclear operations. Trading posted flat results, but Entergy’s increasing share of profits from its marketing and trading joint venture with Koch prompted the company to raise its earnings guidance for the year. The company also said that liquidity in the market improved in the third quarter, leading to higher trading volumes and improved operational earnings.

“Operating results reflect fundamentally strong performance across our businesses,” said CEO J. Wayne Leonard. “Over the past four years we made tough decisions that were necessary to position our company to withstand some of the most severe market conditions our industry has ever endured. While we are now realizing some of the benefits of those decisions, there is much work left to be done.”

In stark contrast to the results of many other merchant energy companies, the operational earnings per share from Entergy’s competitive businesses increased by 45% from 31 cents per share, or $68.1 million, in third quarter 2001, to 45 cents per share, or $100.5 million, in third quarter 2002. However the increase came mainly from additional nuclear capacity acquired by Entergy’s non-utility nuclear business rather than from energy marketing and trading, which posted lower earnings. Net earnings for the competitive businesses rose 19% to $121.4 million.

Entergy Nuclear earnings rose 111% to $73.1 million, or 32 cents per share. The increase was due primarily to the full quarter’s contribution in 2002 of Indian Point 2, which was acquired in September 2001, as well as the contribution for a portion of third quarter 2002 of Vermont Yankee, which was acquired at the end of July 2002.

Energy Commodity Services, which includes earnings contributions from Entergy-Koch L.P. and Entergy’s non-nuclear wholesale assets, reported a 28% drop in earnings to $48.3 million, or 22 cents per share. Entergy-Koch L.P. contributed slightly lower operational earnings primarily as a result of lower volumes of gas transported and higher production costs at Gulf South Pipeline, the company said. Earnings from Entergy-Koch’s trading operations, EKT, were flat compared to the prior year. Volumes of gas and electricity traded in third quarter 2002 were both up more than 20% compared to third quarter 2001.

Current quarter energy trading results showed marked improvement when compared to second quarter 2002 results, the company added. The improvement resulted from improved liquidity in the market during the period, following months when many competitors were exiting the trading business, causing market prices to disconnect from market fundamentals.

As was the case in the first two quarters of 2002, Entergy said the income sharing mechanisms that are part of the Entergy-Koch partnership agreement allocated substantially all of the partnership’s income to Entergy in the third quarter of this year.

CFO C. John Wilder said because the company is getting a larger share of the profits from the Entergy-Koch joint venture, it is raising its operational earnings per share guidance to the $3.60 to $3.70 range for full year 2002. “Looking ahead to 2003, we are highly confident that our $3.75 to $3.95 range is well within our reach, given the consistently solid performance and underlying strength of each of our businesses.”

The first nine months of 2002 produced many challenges for Entergy and the results we’ve achieved in an extremely tough market provide evidence that our business fundamentals are sound and our strategic initiatives are on track,” he said.

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