Ameren (AEE) Best estimates for third-quarter earnings, lower year-over-year revenue

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Ameren CorporationAEE’s third-quarter 2020 earnings of $1.47 per share from continuing operations beat Zacks’ consensus estimate of $1.44 by 2.1%. The net result is in line with the figure reported a year ago.

Notably, increased infrastructure investments made across all business segments, new Ameren Missouri electrical service rates effective April 1, 2020, and lower operating and maintenance expenses at Ameren Missouri. Missouri benefited quarterly results. However, these favorable factors were offset by lower Ameren Missouri retail electricity sales due to milder than normal temperatures and the impact of COVID-19.

Total revenue

Total revenue was $1,628 million in the reported quarter, down 1.9% year-over-year due to lower electricity sales volumes. Revenue also lagged 5.2% from Zacks’ consensus estimate of $1,717 million.

Ameren Corporation Price, Consensus, and EPS Surprise

Ameren Corporation Price, Consensus, and EPS Surprise

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

Ameren’s total electricity sales volume fell 1.7% to 20,015 million kilowatt hours (kWh) from 20,355 million kWh in the year-ago quarter. However, gas volumes increased by 7% to 30 million decatherms.

Total operating expenses were $1,134 million, down 0.4% year over year. Interest expense was $110 million compared to $96 million a year ago.
The company’s operating profit fell 5% to $494 million from $520 million in the year-ago quarter.

Sector results

Ameren Missouri The segment reported operating profit of $297 million for the third quarter, compared with $300 million in the year-ago quarter. The decline can be attributed to lower electricity sales due to milder than normal weather in the third quarter of 2020 as well as the impact of COVID-19. In addition, third quarter earnings were negatively impacted by lower fuel efficiency performance incentives compared to the same period a year earlier.

Electrical Distribution Ameren Illinois The segment recorded operating profit of $34 million, compared to $32 million in the corresponding quarter last year. Higher earnings on infrastructure and energy efficiency investments benefited this segment’s net income, which was partially offset by a lower return on allowed equity.

Ameren Illinois Natural Gas The segment recorded an operating profit of $2 million compared to a loss of $1 million in the prior year quarter. The rise was driven by higher profits on infrastructure investments.

Amerin Transmission The segment recorded an operating profit of $62 million in the third quarter, compared to $53 million in the corresponding quarter of the previous year, thanks to an increase in profits on infrastructure investments.

Financial condition

The company reported cash and cash equivalents of $6 million as of September 30, 2020, compared to $16 million at the end of 2019.

As of September 30, 2020, long-term debt totaled $10,172 million, compared to $8,915 million as of December 31, 2019.

At the end of the third quarter of 2020, cash flow from operating activities was $1,329 million, compared to $1,668 million at the end of the third quarter of 2019.

Advice

Ameren has cut its 2020 revenue forecast. The company now expects earnings in the range of $3.40 to $3.55 per share, down from an earlier forecast of $3.40 to $3.60. . Currently, Zacks’ consensus estimate for the company’s 2020 earnings is pegged at $3.46 per share, slightly below the midpoint of its guided range.

Zacks Rank

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

Other utility versions

Entrance ETR reported adjusted earnings of $2.44 per share in the third quarter of 2020, which beat Zacks’ consensus estimate of $2.42 by 0.8%.

American Electric Power AEP reported third-quarter 2020 adjusted earnings per share of $1.47, which beat Zacks’ consensus estimate of $1.46 by 0.7%.

NextEra Energy NEE reported adjusted earnings of $2.66 per share in the third quarter of 2020, which beat Zacks’ consensus estimate of $2.65 by 0.4%.

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