ENTERGY NEW ORLEANS, LLC (ENJ)·Q2 2025 Earnings Summary

Executive Summary

• Entergy New Orleans (ENJ), as part of Entergy Corporation, reported consolidated Q2 2025 adjusted EPS of $1.05; management affirmed FY25 adjusted EPS guidance and raised 2027–2028 outlook midpoints, citing stronger operating cash flow and a larger capital plan .
• Q2 Utility earnings rose year over year on rate actions and higher retail sales; Parent & Other loss narrowed due to a prior-year pension settlement charge timing, while higher O&M, depreciation, and E-TX MISO capacity costs partially offset gains .
• Strategic focus sharpened with completion of ENJ’s regulated natural gas LDC sale on July 1, 2025 (base price $285.5M for ENJ gas assets), refocusing resources on the growing electric business .
• Near-term stock reaction catalysts for the parent include affirmed FY25 guidance, capital plan expansion to $40B, nuclear PTC monetization, and industrial load momentum; risks include cost recovery timing (MISO capacity), O&M inflation, and storm securitization pacing .

What Went Well and What Went Wrong

What Went Well

• “It was another solid quarter… We remain well positioned to capture significant opportunity ahead and drive value for our stakeholders,” said CEO Drew Marsh, as adjusted EPS reached $1.05 and FY25 guidance was affirmed .
• Utility earnings increased on net regulatory actions, higher retail sales volume, and higher other income, reflecting constructive rate outcomes and demand strength across jurisdictions .
• ENJ closed the divestiture of its gas LDC business, enabling focus on electric operations; transaction approvals were secured across relevant regulators and councils .

What Went Wrong

• Higher other O&M (generation scope, vegetation maintenance, and bad debt) and higher depreciation (plant-in-service growth and E-LA nuclear depreciation rate increase) pressured margins year over year .
• E-TX faced higher MISO capacity auction costs not currently recovered in rates, dampening Utility earnings until recovery mechanisms are implemented .
• Share dilution impacted per-share metrics due to settlement of equity forwards in May 2025 and unsettled equity forwards amid stock price increases .

Financial Results

ENJ Quarterly Fundamentals (last 4 reported quarters; oldest → newest)

Utility vs Parent & Other EPS Contribution (Entergy consolidated)

KPIs (Utility operating measures, consolidated)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Drew Marsh (CEO): “It was another solid quarter… We remain well positioned to capture significant opportunity ahead and drive value for our stakeholders.” .
• CEO on strategic focus after gas sale: “This strategic transaction allows us to sharpen our focus on Entergy’s growing electric operations and invest in a stronger, more resilient energy future.” .
• Call highlights: management affirmed FY25 adjusted EPS, raised 2027–2028 outlooks, and emphasized industrial demand and disciplined equity financing (forwards settled; liquidity via unsettled forwards) .

Q&A Highlights

• Nuclear PTC monetization: Management recorded ~$570M across five units and does not rely on multi-year credits in the outlook absent Treasury guidance/audit finalization .
• Equity plan: ~two-thirds of equity needs through 2028 contracted; ~$800M forwards settled in Q2; ~$2.3B unsettled forwards available as of 6/30/25 to support investment cadence .
• Industrial load and data centers: LPSC settlement to support a new large customer; management highlighted robust pipeline and procedural schedule for approvals .
• Cost recovery: Texas legislative actions to expedite storm cost securitization and allow MISO capacity cost recovery via rider improve forward cost recovery visibility .

Estimates Context

• Wall Street consensus estimates for ENJ (Entergy New Orleans, LLC) are unavailable; ENJ is a subsidiary issuing bonds and not covered by equity EPS consensus. Consolidated Entergy (ETR) provided actuals and guidance; comparison to ENJ-specific sell-side estimates is not applicable .
• Revenue consensus: Not available for ENJ; actual ENJ revenue shown above from S&P Global fundamentals.*
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• ENJ’s Q2 sits within a strong consolidated quarter for Entergy: adjusted EPS of $1.05, FY25 guidance affirmed, and raised outer-year outlooks—supportive for credit profile and parent equity narrative .
• Strategic pivot completed: ENJ’s gas LDC sale closed (base price $285.5M), concentrating capital and management attention on regulated electric operations and resilience investments .
• Demand-led growth: Weather-adjusted retail sales rose 4.5% with industrial strength; regulatory settlements and riders across jurisdictions underpinned earnings momentum .
• Watch cost headwinds: Higher O&M, depreciation, and near-term unrecovered MISO capacity costs at E-TX temper margin expansion until recovery mechanisms take effect .
• Financing discipline: Equity forwards settled and liquidity from unsettled forwards provide flexibility to fund a $40B capital plan while mitigating dilution over time .
• Near-term trading lens (parent equity/ENJ bonds): Catalysts include affirmed FY25 guidance, industrial announcements, and nuclear PTC cash realization; risks center on cost recovery lags and storm securitization timing .
• Action: Position for regulatory milestones (e.g., Hyperion approvals), PTC monetization receipts, and Texas recovery implementation; monitor O&M trajectory and equity issuance pacing through 2026–2028 .

Sources

• Q2 2025 8-K earnings release and appendices: EPS, business drivers, OCF, utility measures, and non-GAAP reconciliations .
• ENJ gas LDC sale press release and 8-K details .
• Earnings call transcript and presentation (capital plan, PTCs, equity forwards, industrial demand) .