Ameren Beats on Earnings, Gives View

Zacks

Ameren Corp. (AEE) posted fourth quarter 2013 earnings from continuing operations of 19 cents per share, beating the Zacks Consensus Estimate of 12 cents by 58.3%. The quarterly earnings were substantially higher than the year-ago earnings of 5 cents by 116.7%.

The year-over-year growth was due to increased rates for Missouri electric and Illinois transmission service. In addition, colder winter temperature resulted in greater demand for electric and gas, which also boosted the bottom-line.

2013 earnings came in at $2.10, which is at the upper end of the earnings guidance of $2.00 to $2.10 per share. The earnings surpassed the Zacks Consensus estimate of $2.07 by 1.5%.

However, the earnings were lower than the year-ago earnings of $2.13 by 1.4%. The year-over-year decline was primarily due to nuclear refueling outage expenses and milder summer which lowered the demand for electricity.

Total Revenue

Ameren’s total operating revenue in the reported quarter was up 5.1% year over year to $1.32 billion. Reported revenue also surpassed the Zacks Consensus Estimate of $1.15 billion by 14.8%.

The year-over-year improvement was due to better electric and natural gas revenue. Electric revenue increased 5.2% while gas revenue increased 4.7%.

Full-year 2013 revenues came in at $5.83 billion, exceeding year-ago revenues of $5.78 billion by 0.9% but missing the Zacks Consensus Estimate of $5.86 billion marginally by 0.5%.

Highlights of the Release

Ameren’s total electricity sales in the reported quarter edged up marginally to 19,716 million kilowatt hours from 19,156 million kilowatt hours in the prior year quarter. Similarly gas volumes also increased to 62,402 thousand decatherms from 53,335 thousand decatherms in the prior-year quarter.

The total operating expenses in fourth quarter were $1.15 billion, increasing marginally from the prior-year period.

Interest expenses were $109 million versus $97 million in the prior-year quarter.

Segmental Performance

Ameren Missouri Segment: Segmental earnings were $395 million in 2013, down from $416 million earned in the year-ago period. The decrease mainly reflects 2013 Callaway refueling outage expenses.

Ameren Illinois Segment: Segmental earnings stood at $160.0 million in 2013 versus $141.0 million in 2012, backed by higher Illinois electric delivery earnings.

Parent Company and Other: The segment incurred a loss of $43 million from continuing operations in 2013, compared with loss of $41 million in 2012.

Financial Condition

Ameren reported cash and cash equivalents of $30.0 million at 2013 end, compared with $184.0 million at 2012 end.

Long-term debt as of Dec 31, 2013 was $5.5 billion versus $5.8 billion as of Dec 31, 2012.

Cash generated from operating activities by Ameren in 2013 were $1.69 billion in-line with the year-ago level.

Capital expenditure in 2013 was $1.38 billion versus $1.06 billion in the year ago level. Free cash flow in 2013 was $314 million versus $627 million in 2012.

Guidance

Ameren expects its 2014 earnings to be in a range of $2.25 to $2.45 per share.

Ameren expects positive returns from its infrastructure investments in FERC-regulated transmission and Illinois energy delivery services will help its earnings to grow at a 7% to 10% compound annual rate through 2018 using 2013 results as the base.

Other Company Release

American Electric Power Company Inc. (AEP) reported fourth-quarter 2013 operating earnings of 60 cents per share, beating the Zacks Consensus Estimate by 7.1%.

Dominion Resources, Inc. (D) reported fourth-quarter 2013 operating earnings of 80 cents per share, missing the Zacks Consensus Estimate by 9.1%.

Duke Energy Corp. (DUK) reported adjusted fourth quarter 2013 earnings of $1.00 per share that came in ahead of the Zacks Consensus Estimate of 94 cents by 6.4%

Zacks Rank

Ameren presently retains a Zacks Rank #3 (Hold).

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