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Ameren (AEE) Up 5.8% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
FTI Consulting (FCN) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

A month has gone by since the last earnings report for Ameren (AEE). Shares have added about 5.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ameren 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 Q4 Earnings Miss Estimates, Revenues Up Y/Y

Ameren Corporation’s fourth-quarter 2018 earnings of 28 cents per share from continuing operations missed the Zacks Consensus Estimate of 32 cents by 12.5%. The bottom line, however, improved when compared to a loss of 24 cents incurred in the year-ago quarter.

The company generated 2018 adjusted earnings of $3.37 per share from continuing operations, which missed the Zacks Consensus Estimate of $3.41 by 1.2%. The bottom line, however, improved 19.1% from the year-ago tally.

Total Revenues

Total revenues came in at $1,419 million in the reported quarter, which improved 1.4% year over year owing to higher electric as well as natural gas sales volumes.

In 2018, the company generated total revenues of $6,291 million, which increased 1.9% from the year-ago tally.

Highlights of the Release

Ameren’s total electricity sales volumes expanded 9.3% to 19,537 million kilowatt hours (kWh) compared with 17,873 million kWh in the year-ago quarter. Moreover, gas volumes expanded 3.4% to 61 million dekatherms.

Total operating expenses summed $1,253 million, up 5.6% year over year.
Interest expenses were $99 million compared with $96 million a year ago.

Financial Condition

Ameren reported cash and cash equivalents of $16 million as of Dec 31, 2018 compared with $10 million at 2017 end.

As of Dec 31, 2018, long-term debt totaled $7,859 million compared with $7,094 million as of Dec 31, 2017.

In 2018, cash from operating activities amounted to $2,170 million compared with $2,118 million in 2017.

Guidance

Ameren issued its 2019 guidance. The company expects its earnings to be in the range of $3.15-$3.35 per share, which is projected to grow at a 6-8% compound annual rate from 2018 through 2023. Currently the Zacks Consensus Estimate for the company’s 2019 earnings is pegged at $3.29 per share, higher than the mid-point of the company provided guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

At this time, Ameren has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Ameren has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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