Entergy(ETR) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Entergy reported an adjusted EPS of $3.65 for 2024, which is in the top half of the guidance range [8] - The company raised its long-term growth outlook through 2028 to greater than 8% [8][40] - Weather-adjusted retail sales grew approximately 4%, driven by strong industrial growth of more than 8% [37] Business Line Data and Key Metrics Changes - Industrial sales increased by 8% for the year and 15% for the fourth quarter [10] - The combined utility expects industrial sales to compound annually at 12% to 13% from 2024 through 2028 [12] Market Data and Key Metrics Changes - Entergy announced a new electric service agreement with a large customer in Mississippi, with expectations to sign an ESA with Meta to expand capacity needs [11] - The company has a robust pipeline for potential growth, particularly in data centers, with 5 to 10 gigawatts of opportunity [13] Company Strategy and Development Direction - Entergy plans to invest$ 37 billion over the next four years to support customer growth and improve system resilience [19] - The company is expanding its renewables portfolio and has active requests for proposals for new renewables in Arkansas and Louisiana [20] - Entergy is exploring new nuclear options and has partnerships to investigate various technologies, including SMRs [58][132] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing growth opportunities and highlighted a strong outlook with double-digit industrial sales growth [33] - The company is focused on stakeholder engagement and has successfully concluded several regulatory processes [15][16] Other Important Information - Entergy executed a 2-for-1 stock split in December, doubling its share count [35] - The company has secured $1.4 billion of equity through its ATM program, with plans to exercise it in 2025 and 2026 [41] Q&A Session Summary Question: Core drivers of the$ 3 billion CapEx update - Management indicated that the capital plan is largely focused on generation for both dispatchable and renewables, with some distribution investment included [54] Question: New nuclear technology focus - Management is considering all forms of new nuclear, including large-scale reactors and SMRs, to provide the best risk profile and value for stakeholders [57][58] Question: Impact of new customers on growth - Management stated that each new customer would be unique, and the investment needed to support them would drive overall growth [68] Question: Financing incremental CapEx - Management discussed optimizing operating cash flow and leveraging large customers to manage equity needs effectively [96] Question: Resiliency programs and capital plan - Management expects to seek approvals for the next phase of resiliency programs by the end of the year [102] Question: Dividend commitment - Management confirmed a target of 6% annual dividend growth, with a potential decline in payout ratio over the outlook period [107] Question: Competition for large load customers - Management noted that competition is global, and Entergy offers a comprehensive value proposition for large load customers [151]