On Weather-Related Risks, Entergy Corporation (NYSE:ETR) Calls For Action

Christine Lawrence - April 8, 2014

Boston, MA 04/08/2014 (wallstreetpr) – Entergy Corporation (NYSE:ETR) is an integrated energy company, mainly involved in production and distribution of electric power. Shares of the company have had decent momentum in recent times, gaining 0.10 percent in the last session.

Although the company is currently doing well in business, as its power plant and distribution channels become more effective and efficient, ETR is worried that utility investment in the U.S. is increasingly coming under risks. And such risks are weather-related catastrophic events. Thus, during a recent electric power conference in New Orleans, the company led the call for action, noting that lack of action would not only lead to unbearable damage to utility installation, but lead to painful loss of jobs and profit for investors.

Frequent catastrophic events

In order to drive the point home about the need for serious action to mitigate weather disasters, Entergy Corporation (NYSE:ETR) observed that weather-related risks had come too frequent and even increased in scale. For example, while there was just about an average of one weather incident leading loss of more than $1 billion in the entire U.S. each year in the 1980s, the number of disastrous weather events increased in 1990s about two each year and in 2000s, the number of destructive weather events grew to five each year. And 2010s has seen the average number of such events soaring to 11 each year.

As a result, for businesses operating along the U.S. Gulf Coast, incidents of plants staying out of operation and customers lacking utility services are becoming too frequent. It has however been established that increased investment in mitigating weather-related risks has paid off. Thus, U.S. companies are better off taking the action to spend more on safety of their investments, according to Entergy Corporation (NYSE:ETR).

Leading by example

Investments in weather safety measures are very huge. But the important of doing so exceeds the risks of staying away from the reality. From an investment standpoint, companies such as Entergy Corporation (NYSE:ETR) which have already spent significantly in the safety for their installations may be a safe haven for investors, in that their cash loss on safety issues is significantly small.

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Christine Lawrence

Christine Lawrence is a financial analyst. She loves analyzing socioeconomic trends in the background of financial moves. She has overall seven years of experience in Auditing, Finance and Writing.

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