A month has gone by since the last earnings report for Ameren Corporation AEE. Shares have added about 2.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Ameren Misses on Q4 Earnings, Provides 2017 Outlook
Ameren posted fourth-quarter 2016 earnings from continuing operations of $0.13 per share, missing the Zacks Consensus Estimate of $0.15 by 13.3%. Earnings however increased 8.3% year over year.
For 2016, the company reported adjusted EPS of $2.68, missing the Zacks Consensus Estimate of $2.70 by 0.7%. However, year over year, this figure improved 4.7% from $2.56 in 2015.
The bottom-line improvement was primarily driven by increased 2016 electric transmission and distribution infrastructure investments made by Ameren Transmission Company of Illinois (ATXI) and Ameren Illinois under modern, constructive regulatory frameworks. Again, higher summer 2016 electric sales to residential and commercial customers was driven by warmer temperatures, higher Illinois natural gas distribution rates and 2016 tax impacts associated with share-based compensation added to the company’s quarterly earnings.
Total revenue of $1,095 million in the fourth quarter of 2016 was up 0.7% year over year on the back of higher electric and gas sales volumes.
For 2016, the company generated total revenue of $5,196 million, which improved 0.3% from $5,180 billion in 2015.
Highlights of the Release
Ameren’s total electricity sales in the reported quarter inched up 0.3% to 18,235 million kilowatt hours (kWh) from 18,172 million kWh in the prior-year quarter. Gas volumes were up 17.4% to 54 million dekatherms from 46 million dekatherms in the prior-year quarter.
Total operating expenses in the fourth quarter were $1,211 million, up 3.7% year over year.
Interest expenses were $95 million, up 4.4% from the year-ago figure.
Ameren reported cash and cash equivalents of $9 million as of Dec 31, 2016, compared with $292 million at 2015 end.
Long-term debt as of Dec 31, 2016 was $6,595 million, compared with $6,880 million as of Dec 31, 2015.
Cash from operating activities in 2016 was $2,123 million, compared with $2,031 million in the prior-year period.
Ameren expects 2017 diluted earnings per share to be in a range of $2.65−$2.85. It continues to expect diluted earnings per share to grow at a 5%−8% compound annual rate from 2016, through 2020.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Ameren Corporation Price and Consensus
Ameren Corporation Price and Consensus | Ameren Corporation Quote
At this time, Ameren's stock has an average Growth Score of 'C', while its Momentun is lagging a bit behind with 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value investors than those looking for growth.
The stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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