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Ameren (AEE) Tops Q3 Earnings Estimates, Raises EPS View

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  • AEE

Ameren Corporation’s AEE third-quarter 2021 earnings of $1.65 per share from continuing operations exceeded the Zacks Consensus Estimate of $1.62 by 1.9%. Moreover, the reported figure improved 12.2% from $1.47 reported in the year-ago quarter.

The year-over-year bottom-line improvement can be attributed to factors like higher earnings generated from increased infrastructure investments made across all business segments due to a change in seasonal electric rate design at Ameren Missouri and higher electric retail sales driven by a recovering economy. Warmer-than-normal summer temperatures in the third quarter along with a higher allowed return on equity at Ameren Illinois Electric Distribution also boosted quarterly earnings.

Total Revenues

Total revenues came in at $1,811 million in the reported quarter, which improved 11.2% year over year due to higher electric as well as natural gas revenues. Revenues also beat the Zacks Consensus Estimate of $1,787 million by 1.3%.

Ameren Corporation Price, Consensus and EPS Surprise

Ameren Corporation Price, Consensus and EPS Surprise
Ameren Corporation Price, Consensus and EPS Surprise

Ameren Corporation price-consensus-eps-surprise-chart | Ameren Corporation Quote

Highlights of the Release

Ameren’s total electricity sales volumes rose 2.3% to 20,474 million kilowatt-hours (kWh) compared with 20,015 million kWh witnessed in the year-ago quarter. However, gas volumes dropped 3.3% to 29 million dekatherms.

Total operating expenses were $1,277 million, up 12.6% year over year.

The company’s interest expenses in the third quarter were $94 million compared with the prior-year quarter’s $110 million.

Segment Results

The Ameren Missouri segment reported earnings of $375 million in third-quarter 2021 compared with $297 million recorded in the prior-year quarter. The year-over-year improvement can be attributed to increased earnings on infrastructure, including wind generation investments, as well as a change in seasonal rate design. Earnings from this segment were also boosted by higher electric retail sales driven by a recovering economy as well as warmer-than-normal summer temperatures.

The Ameren Illinois Electric Distribution segment reported earnings of $36 million for third-quarter 2021 compared with $34 million registered in third-quarter 2020. The year-over-year improvement was driven by increased earnings from infrastructure and energy efficiency investments and a higher allowed return on equity due to a higher projected average 30-year U.S. Treasury bond yield in 2021 compared to 2020.

The Ameren Illinois Natural Gas segment incurred a loss of $8 million for third-quarter 2021 against earnings of $2 million in the prior-year quarter. This year-over-year deterioration was led by a change in rate design.

The Ameren Transmission segment reported earnings of $73 million in third-quarter 2021, compared with $62 million in the prior-year quarter. The improvement can be attributed to higher earnings from infrastructure investment.

Financial Condition

Ameren reported cash and cash equivalents of $7 million as of Sep 30, 2021, compared with $139 million registered at 2020-end.

As of Sep 30, 2021, long-term debt totaled $12,444 million compared with $11,078 million as of Dec 31, 2020.

During the first nine months of 2021, cash flow from operating activities amounted to $1,192 million compared with $1,329 million generated in the prior-year period.

Guidance

Ameren raised its 2021 guidance. The company currently expects to generate earnings per share in the range of $3.75-$3.95, compared with its earlier guidance of $3.65-$3.85. Currently, the Zacks Consensus Estimate for 2021 earnings is pegged at $3.78 per share, lower than the midpoint of the guidance.

Zacks Rank

Ameren currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

American Electric Power AEP reported third-quarter 2021 adjusted earnings per share of $1.43, which missed the Zacks Consensus Estimate of $1.44 by 0.7%.

NextEra Energy NEE reported third-quarter 2021 adjusted earnings of 75 cents per share, which exceeded the Zacks Consensus Estimate of 72 cents by 4.2%.

Public Service Enterprise Group Incorporated PEG, or PSEG, reported third-quarter 2021 adjusted operating earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate of 92 cents per share by 6.5%.


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