Power company Entergy on Wednesday announced a steep drop in earnings for the second quarter, even as it unveiled plans to unload two soon-to-close nuclear power plants.
As-reported earnings fell from $410 million ($2.27 per share) in second-quarter 2017 to $245 million ($1.34 per share) in the latest reporting period. Operational earnings, on a non-generally accepted accounting principles basis, dropped from $561 million ($3.11 per share) to $327 million ($1.79 per share) on a year-over-year basis.
The driver of the earnings reduction was the Entergy Wholesale Commodities business, which owns and operates several nuclear power units. The business lost $57 million ($0.31 per share) in the latest quarter on an as-reported basis, and was in the black by $25 million ($0.14 per share) on an operational basis. Both were drastically lower than their corresponding 2017 quarterly numbers: earnings of $223 million ($1.24 per share) on an as-reported basis and $375 million ($2.08 per share) on an operational basis.
The key difference between the two reports was a second-quarter 2017 reduction in income taxes that boosted earnings by $373 million ($2.07 per share).
Entergy Wholesale owns the Pilgrim nuclear power plant in Massachusetts and Palisades plant in Michigan, both of which as of Wednesday it plans to sell to Holtec International in coming years. When the deals are complete, a joint venture of Holtec and SNC-Lavalin will be in charge of decommissioning the facilities. During the company’s earnings conference call Wednesday, one analyst noted that the remaining operational Entergy Wholesales Commodities plant, Indian Point in New York state, was not included in the deal.
“[I]f you recall, at up until a little while ago, Palisades was going to be the first plant that we will close. Since that didn’t come to fruition we continued on the path of the package deal with Pilgrim and Palisades because they were originally … the next two in line,” Entergy Chairman and CEO Leo Denault said.
