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ENTERGY MISSISSIPPI, LLC (EMP)·Q2 2024 Earnings Summary

Executive Summary

  • Entergy Mississippi’s parent consolidated adjusted EPS was $1.92, up from $1.84 in Q2 2023; as-reported EPS was $0.23, reflecting a Louisiana regulatory settlement charge at Utility and a pension “lift-out” at Parent & Other; 2024 adjusted EPS guidance of $7.05–$7.35 was affirmed .
  • Regulatory clarity improved: the Mississippi PSC approved Entergy Mississippi’s annual FRP filing; Entergy Louisiana reached in-principle agreement to resolve FRP issues and SERI litigation—key catalysts for rate stability and investment pacing across the system .
  • Operationally, retail sales rose 5.0% (weather-adjusted +2.9%), led by industrial customers; consolidated operating cash flow increased to $1.03B (+$159M YoY) on timing of vendor payments and higher customer receipts .
  • Management called out Hurricane Beryl restoration costs of $75–$85M with recovery through normal mechanisms; O&M savings are expected to be back-half weighted, largely in Q4—supportive of the full-year guide .

What Went Well and What Went Wrong

What Went Well

  • Regulatory progress and clarity: “In June, Entergy Mississippi’s annual FRP filing was approved…[placing] Entergy Mississippi in a strong position to bring additional growth to the state” .
  • Strong adjusted earnings and guidance reaffirmed: “Adjusted earnings were $1.92 per share… we remain firmly on track to meet our 2024 guidance” .
  • Industrial demand strength: Weather-adjusted retail sales rose 2.9%, with industrial +5.1% on higher large customer sales (notably petroleum refining) .

What Went Wrong

  • Elevated expense headwinds: Higher other O&M, depreciation, and interest expense pressured results; Parent & Other booked a one-time pension settlement charge (pre-tax $(317)M) .
  • Louisiana regulatory charge: A $(150)M pre-tax regulatory charge tied to Entergy Louisiana’s FRP settlement reduced as-reported EPS (excluded from adjusted) .
  • Storm costs: Hurricane Beryl restoration estimated at $75–$85M, creating near-term recovery and execution needs despite expected regulatory recovery mechanisms .

Financial Results

Note: Entergy Mississippi (EMP) does not publish standalone EPS/Revenue; consolidated Entergy Corporation (ETR) results and Utility operating metrics include Mississippi.

MetricQ2 2023Q1 2024Q2 2024
Consolidated As-Reported Net Income ($USD Millions)$391 $75 $49
Consolidated Adjusted Net Income ($USD Millions)$391 $230 $411
As-Reported Diluted EPS ($USD)$1.84 $0.35 $0.23
Adjusted Diluted EPS ($USD)$1.84 $1.08 $1.92
Consolidated Operating Cash Flow ($USD Millions)$866 —$1,025

Segment EPS (consolidated per share basis):

Segment EPSQ2 2023Q2 2024
Utility As-Reported ($)$2.42 $2.06
Utility Adjusted ($)$2.42 $2.58
Parent & Other As-Reported ($)$(0.58) $(1.83)
Parent & Other Adjusted ($)$(0.58) $(0.66)

Utility KPIs (systemwide):

KPIQ2 2023Q2 2024Weather-Adjusted Δ
Total Retail Sales (GWh)29,905 31,392 +2.9%
Industrial Sales (GWh)13,301 13,973 +5.1%
Other O&M + Nuclear Refueling ($/MWh)$20.53 $20.99 —

Estimates comparison: S&P Global consensus for Q2 2024 could not be retrieved due to access limits; estimates context provided below.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY 2024$7.05–$7.35 $7.05–$7.35 Maintained
O&M Savings TimingFY 2024Not specifiedMajority realized in Q4 (quarterly timing considerations) Clarified timing
Storm Cost Recovery (Beryl)2H 2024N/A$75–$85M; recover via normal mechanisms New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Current Period (Q2 2024)Trend
Mississippi FRPE-MS annual FRP filed MPSC approved E-MS FRP; strong position to attract growth Improving regulatory clarity
Louisiana FRP & SERILPSC approved $1.9B resilience Phase 1; SERI CCNO settlement in principle E-LA FRP settlement in principle; SERI settlement with LPSC staff in principle De-risking litigation; settlement momentum
Resilience/StormsGRIP-supported microgrid; vegetation management spend Beryl restoration $75–$85M; resiliency plan filings in TX/NO; potential right-of-way expansion Accelerating resilience focus
Industrial Load/Data CentersIndustrial outlook laid out; AWS project approvals 5–10 GW hyperscale pipeline under discussion; system load growth strong Strengthening demand pipeline
Renewables ExpansionOngoing RFPs and filings JDA with NextEra for up to 4.5 GW; LPSC enhanced RFP up to 3 GW Scaling renewables

Management Commentary

  • CEO Drew Marsh: “We successfully executed on key operational, customer, and regulatory fronts… paved the way to capture the robust growth in front of us” . On Mississippi: “Entergy Mississippi’s annual FRP filing was approved… strong position to bring additional growth to the state” .
  • CFO Kimberly Fontan: “Adjusted earnings were $1.92 per share… firmly on track to achieve our adjusted EPS guidance” . “Net liquidity is strong at $5.9 billion… quarterly considerations include 90% of remaining O&M savings in Q4” .
  • Resilience: Management highlighted Beryl learnings and stakeholder engagement to potentially expand right-of-way trimming and accelerate asset hardening .

Q&A Highlights

  • Regulatory settlements and capital allocation: Expect fuller CapEx update at EEI in November following Louisiana/FERC settlements .
  • Data center opportunity: 5–10 GW hyperscale pipeline from active customer discussions; details to come when customers go public .
  • Resilience/right-of-way: Potential state commission rulemaking to extend right-of-way trimming; design upgrades to modern standards reduce vulnerability .
  • AWS regulatory approvals: Mississippi pre-approved CCN process, enabling timely build to serve AWS; renewables additions in Mississippi to support clean energy needs .
  • Texas legislative pathway: Opportunity in 2025 session to facilitate accelerated resiliency spend (including transmission) .

Estimates Context

  • We could not retrieve S&P Global consensus estimates for Q2 2024 due to access limitations; therefore, beat/miss versus Street is unavailable at this time [GetEstimates error]. Values would be retrieved from S&P Global when access permits.

Key Takeaways for Investors

  • Mississippi-specific: FRP approval by MPSC enhances rate stability and credit positioning for Entergy Mississippi, supporting customer growth and investment pacing .
  • Consolidated execution: Adjusted EPS strength and affirmed FY guide indicate operating momentum; weather and industrial demand provided tailwinds .
  • Regulatory de-risking: In-principle settlements in Louisiana (FRP) and SERI litigation reduce headline risk and improve visibility; potential August 14 LPSC actions are near-term catalysts .
  • Expense and financing watch: Higher O&M, depreciation, and interest expense remain headwinds; continued focus on O&M savings (back-half weighted) and liquidity management is critical .
  • Resilience spend path: Beryl-related learnings could accelerate resiliency investment and vegetation policies; monitor commission rulemaking and Texas legislative developments .
  • Demand pipeline: Active hyperscale/data center discussions and growing industrial load underpin medium-term capacity and renewables additions; monitor Mississippi projects and broader RFP outcomes .
  • Actionable: Ahead of LPSC meeting and EEI in November, positioning for regulatory approvals and CapEx clarity could drive sentiment; in Mississippi, FRP stability supports EM P's constructive rate environment and growth execution .