Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026, for Entergy Corporation and its Registrant Subsidiaries (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy Resources). Entergy operates primarily through a single reportable segment, Utility, providing electric power generation, transmission, and distribution across Arkansas, Louisiana, Mississippi, Texas, and the City of New Orleans. The natural gas distribution businesses in Louisiana and New Orleans were sold on July 1, 2025, and are no longer included in operations.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Operating Revenues | $3,187.6 million | $2,846.9 million |
| Net Income Attributable to Entergy Corp. | $384.9 million | $360.8 million |
| Diluted Earnings Per Share | $0.83 | $0.82 |
| Operating Cash Flow | $829.0 million | $536.2 million |
| Investing Cash Flow | ($2,421.9 million) | ($1,710.4 million) |
| Financing Cash Flow | $3,235.1 million | $1,827.9 million |
| Debt to Capital Ratio | 65.9% | 64.3% |
| Cash and Cash Equivalents (End of Period) | $3,571.1 million | $1,513.4 million |
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased by approximately $340.7 million (12%) compared to Q1 2025. Drivers included higher retail electric prices, increased return on construction work in progress, and higher fuel/rider revenues. This was partially offset by a $72 million decrease due to the sale of natural gas distribution businesses and unfavorable weather impacts on residential sales.
- Profitability: Net income attributable to Entergy Corporation increased by $24.2 million (6.7%). The increase was driven by higher utility net income, partially offset by an $18 million non-cash impairment charge in the "Parent & Other" segment related to the sale of the Independence power plant interest.
- Winter Storm Fern Impact: In January 2026, Winter Storm Fern caused severe infrastructure damage. Entergy estimates total restoration costs at approximately $480 million ($400 million capital, $80 million non-capital). Natural gas purchases in January 2026 surged to $483 million compared to $207 million in January 2025 due to cold weather demand and supply constraints.
- Capital Expenditures: Investing cash outflows increased by $711 million, primarily due to higher non-nuclear generation construction spending (Ironwood, Jefferson, Richland Parish, Waterford projects) and $136 million in storm restoration expenditures.
- Debt Issuances: Financing activities provided $3.2 billion, driven by long-term debt issuances totaling approximately $2.4 billion across subsidiaries (Arkansas, Louisiana, Mississippi) and $346 million in proceeds from equity forward sale settlements.
Guidance, Outlook, and Risks
- Capital Plan Update: Entergy updated its 2026-2029 capital plan, with 2026 planned construction and capital investments totaling $13.2 billion. This reflects incremental investments for generation projects, particularly in Louisiana to serve large-scale data centers.
- Data Center Demand: Significant load growth is anticipated from large-scale data centers. Entergy Louisiana entered into an electric service agreement with a Meta Platforms subsidiary (Evest) for a second data center in north Louisiana, requiring approximately $12.9 billion in new generation and transmission resources (pending LPSC approval). Entergy Mississippi also executed agreements to serve Amazon Web Services data center expansions.
- Regulatory Proceedings:
- Arkansas: APSC approved the Arkansas Cypress Solar facility but set a cost benchmark for the Jefferson Power Station that was $90 million below Entergy's estimate. Entergy is proceeding with the project as a strategic investment.
- Louisiana: LPSC is reviewing applications for seven new combined cycle units and transmission lines to serve the Meta data center. A hearing is scheduled for December 2026.
- Texas: PUCT approved the Transmission Cost Recovery Factor (TCRF) rider effective April 2026.
- Risks and Contingencies:
- Storm Cost Recovery: Entergy plans to work with regulators to recover prudently incurred storm costs from Winter Storm Fern. Mississippi legislation passed in April 2026 allows for system restoration bonds to securitize these costs.
- Nuclear Oversight: The NRC issued a preliminary "white" finding with "low safety significance" regarding an emergency diesel generator at Grand Gulf. If finalized, the plant would move to Column 2 of the oversight matrix, requiring supplemental inspection.
- Interest Rates and Inflation: Rising interest rates and inflationary pressures on supply chains and labor could impact capital project costs and the ability to recover costs from customers.
Investor Verification Checklist
- Storm Cost Recovery Mechanisms: Verify the regulatory status and timeline for recovering the estimated $480 million in Winter Storm Fern costs across Louisiana, Mississippi, and Arkansas.
- Data Center Project Approvals: Monitor the LPSC proceedings regarding the $12.9 billion generation and transmission application for the Meta data center in Louisiana and the associated cost recovery protections.
- Jefferson Power Station Benchmark: Track the APSC's final determination on the cost benchmark for the Jefferson Power Station in Arkansas and any potential disallowances or cost overruns.
- Grand Gulf NRC Status: Confirm the final NRC determination on the emergency diesel generator finding and any associated operational or cost impacts.
- Capital Expenditure Execution: Assess the ability to execute the updated $13.2 billion 2026 capital plan within budget, given supply chain and labor constraints.