(AEE) Ameren Misses Earnings – Increases Year Over Year

Before the bell, Ameren Corp. (AEE) reported first quarter 2013 earnings from continuing operations of 22 cents per share, below the Zacks Consensus Estimate of 26 cents. However, the quarterly result jumped 46.7% from the year-earlier earnings of 15 cents. Higher contribution from the company’s Ameren Missouri and Ameren Illinois units drove the year-over-year growth.

Operational Performance

Total operating revenue in the reported quarter inched up 4.5% to $1,475.0 million. However, revenue failed to meet the Zacks Consensus Estimate of $1,633.0 million. Electric revenue surged 2.3% to $1,088.0 million while gas revenue increased more than 11%, on a year-over-year basis. A harsh winter generated higher electric and natural gas sales volumes.

On Mar 2013, Ameren entered into an agreement to offload its merchant generation business, Ameren Energy Resources Company or AER, to an affiliate of Dynegy Inc. (DYN). AER consists primarily of Ameren Energy Generating Company or Genco, including Genco’s 80% ownership interest in Electric Energy, Inc.; AmerenEnergy Resources Generating Company or AERG; and Ameren Energy Marketing Company.

Segmental Performance

Ameren Missouri Segment: Segmental earnings were $40 million, compared with $21.0 million in the year-ago quarter. The improvement mainly reflects higher electric and natural gas sales volumes owing to normal winter weather in the reported quarter as against a very mild winter last year. New electric service rates, which got effective in Jan 2013, also contributed to the improvement. However, higher non-fuel operations and maintenance expenses partially offset the positives.

Ameren Illinois Segment: Segmental earnings boosted 14.8% year over year to $31.0 million in the quarter. The increase in earnings reflects higher electric and natural gas sales volumes owing to normal first quarter 2013 winter temperatures, relative to warmer-than-normal first quarter 2012 temperatures. Additionally, new rates for electric transmission and the absence in 2013 of a required donation related to the implementation of formula rates in Illinois also benefitted earnings. However, the results were partially tempered by a fall in electric delivery service revenues due to variation in the timing and amount of expected full-year recoverable costs under formula ratemaking.

Financial Condition

Ameren reported cash and cash equivalents of $161.0 million in the first quarter 2013, compared with $184.0 million at 2012 end. Long-term debt increased slightly to $5,803.0 million from $5,802.0 million at year-end 2012. The debt-to-capitalization ratio stood at 47.1% in the reported quarter. The company generated cash of approximately $379.0 million from operating activities compared with $383.0 million generated in the year-ago quarter.


Ameren anticipates earnings from continuing operations in the range of $2.00 to $2.20 per share for 2013.

Zacks Rank

Ameren presently retains a short-term Zacks Rank #3 (Hold). Stocks worth accumulating now are Brookfield Infrastructure Partners L.P. (BIP) and Empresa Nacional de Electricidad S.A. (EOC), both carrying a Zacks Rank #1 (Strong Buy).

AMEREN CORP (AEE): Free Stock Analysis Report

BROOKFIELD INFR (BIP): Free Stock Analysis Report

DYNEGY INC-NEW (DYN): Free Stock Analysis Report

ENDESA-CHILE (EOC): Free Stock Analysis Report

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