Entergy (NYSE:ETR) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Access the full call at https://events.q4inc.com/attendee/703279949
Summary
Entergy Corp reported a strong financial performance for Q1 2026, with adjusted earnings per share of $0.86 and an 8.5% growth in retail sales.
The company launched the Fair Share+ pledge to ensure data centers contribute to infrastructure costs, securing agreements with Meta for new data centers, which are expected to generate $7 billion in benefits.
Entergy Corp raised its capital plan to $57 billion, driven by new electric service agreements and growth in industrial sales, with an anticipated 8.5% compound annual growth in retail sales through 2029.
Operational highlights include the first fire milestone of the Orange County Advanced Power Station and capital savings in transmission projects, while expanding renewable and storage capacity with active RFPs for over 4,500 megawatts.
Future outlook remains positive with strong growth prospects, supported by strategic investments and robust customer agreements, with plans to provide more details at an upcoming Investor Day.
Full Transcript
OPERATOR
Good Morning, My name is John and I will be your conference operator today. At this time I would like to welcome everyone to Entergy’s first quarter 2026 earnings call and teleconference. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by the number one on your telephone keypad and if you would like to withdraw your question, press Star one again. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation.
Liz Hunter (Vice President of Investor Relations)
Liz, Good morning. Thank you John and thanks to everyone for joining this morning. We will begin today with comments from Entergy’s Chair and CEO Drew Marsh and then Kimberly Fontan, our CFO will review results in today’s call. Management will make certain forward looking statements. Actual results could differ materially from these forward looking statements due to a number of factors which are set forth in our earnings release, our slide presentation and our SEC filings. Entergy does not assume any obligation to update these forward looking statements. Management will also discuss non-GAAP financial information reconciliations to the applicable GAAP measures measures are included in today’s press release and slide presentation, both of which can be found on the Investor Relations section of our website. And now I will turn the call over to Drew.
Drew Marsh (Chair and CEO)
Thank you Liz Good morning everyone. We had a productive first quarter in which we delivered strong financial results. We launched our Fair Share plus pledge and we advanced customer initiatives with the execution of several electric service agreements, including the one with META that improve our financial outlook well into the future.. Beginning with financial results today we are reporting first quarter adjusted earnings per share of $0.86. 2026 guidance remains on track and we are increasing our already strong adjusted EPS outlook driven by 8.5% retail sales growth. Now I’ll cover the business updates in the quarter and as always, I’ll start with the customer. For several years we have worked with stakeholders to recruit data centers and capture the transformative impact they can have on our communities and through investment, jobs and other support, all at the same time protecting and benefiting existing customers. Earlier this year we formalized that commitment with the launch of our Fair Share+ pledge. The Fair Share+ pledge is a set of guiding principles that ensures that data centers pay their fair share for the power they consume plus additional benefits for customers and communities. Our pledge aligns with the Ratepayer Protection Pledge that our customers signed with the White House. Fair Share is achieved in several ways. Minimum bills and contract length cover incremental costs, termination provisions ensure current customers avoid unneeded costs, clean energy terms support a potential future transition, and strong credit terms give us confidence in all of it. Fair share also means that data centers cover their portion of fixed costs that our current customers pay for today. The fair share portion alone is the source of the estimated $7 billion of benefits we have highlighted, and current customers bills will be lower than they otherwise would have been because data centers are paying for the incremental infrastructure they need as well as their share of fixed costs. The plus component is all of the community benefits originally envisioned by our state and local leaders, including well paying jobs and targeted workforce development a substantial influx of new support for schools, nonprofits and other state and community needs and multiplier effects from new businesses and employment opportunities that come about because of the data centers. The plus component also includes a stronger electric system with reliability and resilience benefits, lower average fuel costs driven by more efficient generation, and specific customer benefits like low income or energy efficiency support. The plus component is clearly valuable and it is in addition to our estimated $7 billion in customer benefits. We’re proud that the framework we committed to more than two years ago is already providing significant benefits for our customers and communities, and those benefits will compound well into the future.. I cannot say enough about the tremendous work our employees have done to create this transformative opportunity for our communities while also providing so much value for our existing customers. And we aren’t done yet. In late March, we announced a new electric service agreement with MEDA for another data center in North Louisiana. The fair share value from this agreement alone is expected to be $2 billion, which is included in the $7 billion I mentioned in the plus category. Over the next 20 years, MEDA has made other commitments $140 million for energy efficiency programs and $60 million for our Power to Care program. Entergy Louisiana will match power to CARE funding, bringing the increase to $120 million. For context, that is a five times annual increase for 2025 levels that will meaningfully improve outcomes for our most vulnerable customers. Shortly after executing the agreement, Entergy Louisiana filed an application with the Louisiana Public Service Commission requesting approval for assets needed as a result of adding the new META data center to the system. The investment includes seven new combined cycle units, transmission infrastructure and battery storage facilities. The cost of the proposed facilities will be covered by payments from meta, whether from their tariff or other contributions. Yet all customers will realize reliability and resilience benefits and lower fuel costs from these investments. We also agreed to pursue another 2 1/2 gigawatts of Renewables and further investigate CCS, nuclear upgrades and new nuclear to support META’s clean energy goals. We’ll add projects to the plan as assets are identified. This month, the Commission affirmed that our request falls under their new Louisiana Lightning Initiative, and they directed that the procedural schedule should support a decision at the December B and E meeting. The Commission’s Lightning Initiative is part of Governor Landry’s Project Lightning Speed to support economic development that provides significant benefits to state and local communities. We are requesting approval for more than $15 billion in capital with about $14 billion in our four year plan. As a result of the agreement and pending the approval request, we’re also raising our sales and adjusted EPS outlook. Kimberly will discuss in more detail beyond the META agreement. So far this year we have signed ESAs totaling over 1,000 megawatts. These agreements were from multiple industries across all our operating companies and they indicate that customer growth beyond data centers remains robust in our region. We also continue to receive data center interest within our service area. After all agreements signed to date, including the recent agreement with META, we still have a pipeline of 7-12 GW of potential data center customers that are not in our plan. Moving beyond the customer growth update, I’d like to cover a few more items. Operational excellence remains a key focus area and we will talk in more detail about that at Investor Day. For today, I’ll share a couple of highlights. Orange County Advanced Power Station achieved its first fire milestone, bringing it one step closer to delivering reliable power for our customers in Texas. We expect the plant to be fully online in late summer. Recently, our power delivery team identified more than $30 million in capital savings on the Commodore to Churchill 230kV project. Our engineers developed a solution which improved the design, lowered materials cost and enabled faster customer delivery. Importantly, the improvement can be applied to future large transmission projects. This kind of innovative thinking, combined with the scale of our capital plan will continue to lower costs for customers and unlock additional customer investment opportunities. Entergy Texas is working to expand its spending generation capacity to serve a growing customer base. Following the Commission’s feedback, they issued an RFP in February for combined cycle capacity and energy across our system. We continue to expand our Renewables portfolio driven by our customers desire for clean energy options. We have active RFPs for more than 1,600 megawatts of Renewables and storage and we have over 4,500 megawatts of Renewables and storage in various stages of negotiation. After selections from prior RFPS in Arkansas, Louisiana and Mississippi. Roughly two thirds of the megawatts in negotiation would be owned. In addition, we are actively managing proposals through Louisiana’s accelerated Renewable review process. These are important tools to help us identify projects supporting customers Clean Energy Goals as we indicated on the previous earnings call, Energy Arkansas filed its base rate case in late February requesting a $45 million rate change which is less than 2%. Because bill impacts vary by customer type, the residential impact would be less than 1%. Some of the features that we requested include an optional time of use rate that provides residential customers with the opportunity to lower bills by shifting energy use to lower cost hours and low income rates that provide a 50% discount on the customer charge for households that qualify for LIHEAP assistance. We also elected to resume Entergy Arkansas Forward Test Year FRP after the rate case is resolved. Entergy Mississippi filed its annual formula rate plan with no change requested. Arkansas and Mississippi both have mechanisms that provide cash allowance for funds used during construction for investments to support significant economic development projects. To that end, Entergy Arkansas filed its first annual Generating Arkansas Jobs act rider in March and Entergy Mississippi updated its interim facilities rate adjustment in January. One additional comment about Mississippi the state recently passed legislation authorizing securitization of costs associated with Winter Storm. Fern Kimberly will provide additional details on that as well Beyond Fair Share plus Our employees continue to work every day for the benefit of the communities we serve. We recently participated in the industry’s LIHEAP Action day in Washington, D.C. to advocate for energy affordability for our customers in need. Congress approved an appropriations package that includes a $20 million increase for LIHEAP, which reflects growing recognition of the program’s importance. For more than 15 years, Entergy has also provided free tax preparation for low to moderate income customers at sites throughout Entergy’s region. In 2025, we helped customers receive $54 million in earned income tax credits, putting money directly into our customers pockets. Finally, we are very excited about our upcoming Investor Day in June. Plan to walk through the clear line of sight for our multi year strategy and outlooks in detail and you’ll hear directly from our leadership team on the opportunities ahead. Highlights will include a conversation with large customers on how we partner together to create better outcomes for our key stakeholders, a view into our operational strategy to successfully execute on the large build cycle ahead of us, a discussion of the work we are doing to unlock additional capital deployment opportunities, a review of our approach to maintaining financial discipline, and finally, a deeper dive into the significant near and long term customer growth opportunities to sustain our strong growth well beyond our five year outlook. We had a productive start to 2026 with solid progress and execution across the business and by continuing to put our customers first, we will deliver premium value to each of our key stakeholders. We look forward to discussing this in more detail with you at our Investor Day. I’ll now turn the call over to Kimberly for the financial update.
Kimberly Fontan (Chief Financial Officer)
Thank you Drew. Good morning everyone. I’ll now review our financial results and provide an update on our long term outlooks. Our results for the quarter were straightforward. Our adjusted EPS was $0.86 as shown on slide 4. The primary drivers were from the effects of investments made for our customers, including regulatory actions net of higher depreciation expense taxes other than income taxes and interest expense from financing capital expenditures. The per share increase was partially offset by a higher share count from settling equity forwards. Industrial sales growth was very strong at 15% as new and expansion projects continue to ramp up their operations. Overall retail sales increased 6%. The earnings contribution from retail sales growth was essentially neutral as higher revenue from the industrial growth was offset by the effects of weather, including positive weather in the first quarter of last year. As Drew discussed, the MEDA contract creates significant customer and community benefits. In addition, we are refreshing our outlooks to reflect the new agreement and other minor updates. The highlights are summarized on slide 5. This agreement further strengthens our retail sales outlook. We now expect approximately 8.5% compound annual retail sales growth through 2029 driven by 16%. Industrial growth data centers continue to be a significant driver along with growth from a variety of traditional Gulf south industries including lng, industrial gases, petrochemicals, agricultural chemicals and primary metals. As a reminder, we only add hyperscale data centers to our plan once we have a signed electric service agreement and then we include them at minimum bill levels. This conservative approach ensures that we can count on the revenue that we’ve included in our plan. Our customer centric four year capital plan is now $57 billion, which is 14 billion higher than our plan quarter. The increase includes the investment needs resulting from the new customer agreement, primarily seven new CCCTs as well as battery storage projects. All seven CCCTs have in service dates in 2030 and 2031 such that not all of the capital for these units is in our four year horizon. For the transmission investments in the filing, we’ve made a conservative assumption not to include them as we work through financing options. We have also not yet included the renewables or Riverbend nuclear upgrade investments discussed in our filing. These would be added to the plan as specific projects are firmed up. The equity associated with our four year plan is now $6.6 billion at the lower end of our target range of 10 to 15% of the total capital plan. Our strategy to be proactive in addressing our equity needs provides certainty and flexibility, giving us ample time to raise. We have successfully sold forward contracts through our robust ATM program as well as the block transaction we executed last March. The agreements we have in place cover about 30% of our four year need with 1.9 billion already contracted. That leaves $4.7 billion to be sourced which is not expected to be needed until late 2027 through 2029. Our forecast also includes $3 billion of hybrid instruments at parent slide 6 summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. Our plan reflects FFO to debt at or above 15% from Moody’s metric throughout …
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