Entergy outlines $41B capital plan through 2029 while expanding data center pipeline to 12 GW

Earnings Call Insights: Entergy Corporation (ETR) Q3 2025

MANAGEMENT VIEW

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CEO Andrew Marsh opened the call by highlighting "strong financial results as well as continued progress on business and regulatory matters." He reported, "Our adjusted earnings per share was $1.53. With our results to date and our biggest quarter behind us, we are narrowing our guidance, raising the bottom by $0.10." Marsh emphasized a sustained top-quartile Net Promoter Score for utility residential service and reaffirmed Entergy's focus on customer affordability and rate stability.

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Marsh detailed ongoing initiatives: "We proactively manage the effect of fuel volatility on customers' bills, through fuel hedging programs and mechanisms to defer fuel costs during peak prices." He also noted the award-winning digital LIHEAP platform and strategic moves to attract hyperscale data center customers, ensuring these clients "pay their fair share of energy infrastructure investments, while bringing other significant benefits to our communities."

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Marsh highlighted new and ongoing industrial and data center investments, referencing Google's commitment to cover the full cost of powering its West Memphis data center and Entergy Mississippi's $300 million Superpower Mississippi initiative. He stated, "Customer rates would be 16% lower than they otherwise would have been due to these large customers," and noted a growing data center pipeline now "extending from 7 to 12 gigawatts."

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Marsh added, "We've added 4.5 gigawatts to our agreement for the purchase of power island equipment," and reported securing "more than 19 gigawatts of capacity, 11 gigawatts of which is accounted for due to growth or other supply needs."

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CFO Kimberly Fontan stated, "Our adjusted EPS for the quarter was $1.53 as shown on Slide 4. Primary drivers were strong sales growth and the effects of investments made for our customers, partially offset by higher other O&M and other operating expenses and an increase in our share count from settling equity forwards." Fontan also highlighted, "Weather-adjusted sales for the quarter were once again very strong, increasing approximately 4.5%. Industrial sales were the largest contributor with more than 7% growth."

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Fontan reported, "We have completed transactions to monetize [nuclear tax credits], which netted more than $535 million after transaction costs."

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Fontan explained, "Our updated capital plan for 2026 through 2029 is $41 billion. The equity associated with that plan is $4.4 billion within the 10% to 15% range of the total capital plan."

OUTLOOK

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Fontan announced, "We are narrowing our 2025 guidance range, raising the bottom by $0.10." She reiterated, "Our adjusted EPS through 2028 remains unchanged. And as we add 2029 to our outlook period, our long-term compound annual growth remains strong at greater than 8%."

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Marsh stated, "Our long-term customer sales growth outlook is robust, including continued support from both traditional industrial and data center customers."

FINANCIAL RESULTS

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Entergy reported adjusted EPS for the quarter of $1.53. Weather-adjusted sales for the quarter increased approximately 4.5%, with industrial sales growing more than 7% due to new and expanding customers.

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The company monetized nuclear tax credits for over $535 million after transaction costs. Entergy's updated capital plan for 2026 through 2029 stands at $41 billion, with $4.4 billion in equity associated with the plan.

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About 45% of the equity need for 2026–2029 is already contracted.

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Through the third quarter, approximately $800 million of equity forward was settled, and an additional $330 million was settled after quarter end.

Q&A

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Constantine Lednev, Wells Fargo: Asked about the 4.5 GW power island equipment and its relation to the CapEx plan. Fontan responded, "The $41 billion includes the capital that's needed to support the load that is in the forecast. The 4.5 incremental gigawatts that Drew referenced would support additional customers that could come online."

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Jeremy Tonet, JPMorgan: Inquired about capital shifting and post-plan period investments. Fontan clarified, "$41 billion through 2029...some plant that closes outside the period. Some of that is alternate finance. So you don't see the spend in this period and all the spend would go out when that closes."

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David Arcaro, Morgan Stanley: Asked about timing for 4.5 GW power equipment. Marsh answered, "The timing for the extra 6 units would support commercial operations in 2031 and 2032."

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Sophie Karp, KeyBanc: Questioned regulatory needs for growth. Marsh stated, "It depends on the jurisdiction...In Mississippi, they have the law that allows for very large economic development projects to move forward...Arkansas just passed the Generating Arkansas Jobs Act, which allows for an expedited process."

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Paul Zimbardo, Jefferies: Asked about renewables as upside opportunities for hyperscalers. Marsh responded, "I think we would expect that there would be additional renewables associated with large hyperscaler deployment in some way."

SENTIMENT ANALYSIS

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Analysts expressed interest in CapEx expansion, data center pipeline growth, and regulatory strategies, with a generally positive and inquisitive tone. Phrases like "Congrats on a great quarter" and "Great. Congrats on a great update" were common.

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Management maintained a confident and proactive tone in both prepared remarks and Q&A, with regular use of terms such as "We're excited," and "We remain confident." Fontan's language was precise regarding financial planning and flexibility, while Marsh repeatedly stressed execution and growth opportunity.

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Compared to the previous quarter, both management and analysts displayed an increased focus on data center opportunities and forward capital allocation, with management’s confidence level appearing to have strengthened.

QUARTER-OVER-QUARTER COMPARISON

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The company expanded its capital plan from $40 billion (previous quarter) to $41 billion (current quarter) for the 2026–2029 period.

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The customer pipeline for data centers increased from 5–10 GW to 7–12 GW.

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Management’s tone shifted from emphasizing resilience and storm recovery to more pointed discussions about scaling for hyperscale data centers and securing equipment for rapid growth.

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Analysts shifted focus from nuclear tax credits and storm recovery mechanisms to questions about incremental CapEx, long-term planning past 2029, and data center-related opportunities.

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Management articulated more clarity and confidence in supply chain security, project execution, and customer-driven growth.

RISKS AND CONCERNS

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Marsh acknowledged, "There are real challenges with labor. I don't think that it's certainly not easy to get the labor lined up. There is a real need for skilled craft of all types."

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Management discussed the need for regulatory approval processes tailored to large economic development projects and the importance of maintaining cost competitiveness despite rising labor and equipment expenses.

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Analysts raised concerns about the timing and certainty of large data center contracts, regulatory proceedings, and capital needs if additional customer agreements are executed.

FINAL TAKEAWAY

Entergy’s third quarter call showcased strengthened financial results, an expanded capital plan, and a rapidly growing data center pipeline now reaching up to 12 GW. Management highlighted robust sales growth, successful monetization of nuclear tax credits, and proactive capital and supply chain strategies to serve a diversifying customer base. With a narrowed and raised 2025 EPS guidance and a greater than 8% long-term EPS growth outlook through 2029, Entergy emphasized its readiness to support accelerating industrial and hyperscale data center demand while maintaining a focus on affordability, resilience, and regulatory adaptation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/etr/earnings/transcripts]

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