Utility Entergy beats profit estimate on growing power demand, lower costs
U.S. electric utility Entergy on Tuesday beat analysts' first-quarter profit forecasts, helped by lower costs and strong demand for large electricity customers like data centers.
The U.S. Energy Information Administration expects national power consumption to reach record highs in 2025 and 2026, driven by rapid expansion of data centers dedicated to artificial intelligence and cryptocurrency, and as homes and businesses use more electricity for heat and transportation.
Entergy's residential sales rose 13.2 per cent to 8,784 gigawatt-hours in the January-to-March quarter, while industrial sales climbed 9 per cent to 13,833 GWh.
Total revenue rose nearly 2 per cent to $2.85 billion, driven by higher electric and natural gas sales. Total operating expenses fell 16 per cent to $2.15 billion.
Entergy, based in New Orleans, Louisiana, provides electricity to nearly 3 million customers across Arkansas, Louisiana, Mississippi and Texas. Its potential data center projects have a total pipeline of 5 gigawatts to 10 gigawatts, company executives said, compared with Louisiana's entire capacity of less than 25 gigawatts.
Nationwide, power demand from data centers is expected to nearly triple by 2028 and could consume roughly 12 per cent of the country's electricity, according to a Department of Energy-backed study.
However, the global trade war sparked by the Trump administration threatens to stall the AI frenzy as companies rethink how they spend the billions of dollars earmarked for developing AI infrastructure.
To meet rising power consumption, Entergy is working to expand its nuclear power supply, which has been in high demand from data center users for its around-the-clock and nearly carbon-free energy.
Entergy recently completed a refueling outage at its 967-megawatt River Bend nuclear power station, and is planning work that will clear the way for expanding its St. Francisville, Louisiana facility by about 40 megawatts, the company said. It is considering adding 275 megawatts of nuclear capacity to its existing fleet.
Entergy also plans to apply to federal regulators to extend its site permit for a new nuclear facility in Mississippi and is in talks with potential customers of the plant.
Entergy affirmed its full-year 2025 adjusted profit forecast of $3.75 to $3.95 per share, compared with analysts' estimate of $3.87.
J.P. Morgan analysts noted that the forecast excludes contributions from Hyundai's $5.8 billion steel plant or CF Industries' $4 billion low-carbon ammonia plant in Louisiana.
Shares of the company fell more than 1 per cent at midday.
Entergy posted an adjusted profit of 82 cents per share for the three months ended March 31, compared with analysts' average estimate of 69 cents, according to data compiled by LSEG.
