Ameren Corp. AEE not surprisingly posted a solid first quarter 2014 performance. Its first quarter 2014 earnings from continuing operations of 40 cents per share beat the Zacks Consensus Estimate by 8 cents. Quarterly earnings were also substantially higher than the year-ago figure of 22 cents by 81.8%.
The year-over-year upside was due to a severe winter season which boosted demand for electric transmission service. Again, infrastructure investments, lower interest expenses and higher Illinois electric delivery service earnings also gave a boost to the company's overall bottom line.
Total Revenue
Ameren's total operating revenue in the reported quarter was up 8.1% year over year to $1,594 million. Reported revenue also surpassed the Zacks Consensus Estimate of $1,438 million by 10.8%.
The year-over-year improvement was due to better electric and natural gas revenues. Electric revenues increased 1.7% while gas revenues shot up 26.1%.
Highlights of the Release
Ameren's total electricity sales in the reported quarter increased 5.3% to 21,086 million kilowatt hours from 20,026 million kilowatt hours in the prior-year quarter. Similarly gas volumes also increased to 86,467 thousand decatherms from 73,140 thousand decatherms in the prior-year quarter.
Total operating expenses in the first quarter were $1,348 million, increasing 4.5% from the prior-year period.
Interest expenses were $92 million versus $101 million in the prior-year quarter.
Segmental Performance
Ameren Missouri Segment: Segmental earnings were $47 million in the first quarter, up from $40 million earned in the year-ago period on the back of a severe winter. Additionally, a decrease in interest expense and efficient cost management also acted as catalysts.
Ameren Illinois Segment: Segmental earnings stood at $53.0 million versus $31.0 million in the year-ago quarter, also attributable to the harsh winter.
Parent Company and Other: The segment narrowed its loss to $3 million from continuing operations in the quarter, from a loss of $17 million in the year-ago period.
Financial Condition
Ameren reported cash and cash equivalents of $26.0 million at quarter end, compared with $30.0 million at 2013 end.
Long-term debt (including current maturities) as of Mar 31, 2014 was $5,874 million versus $6,038 million as of Dec 31, 2013.
Cash generated from operating activities by Ameren in the first quarter were $239 million compared with $379 million in the year-ago period.
Capital expenditure in the first quarter was $442 million versus $275 million a year ago.
Guidance
Ameren lifted its 2014 earnings guidance to the range of $2.30 to $2.50 per share from its earlier expectation of $2.25 to $2.45 per share.
Ameren expects positive returns from its infrastructure investments in FERC-regulated transmission projects. Also, Illinois energy delivery services will help its earnings to grow at a 7% to 10% compound annual rate through 2018 using 2013 as the base year.
Other Company Releases
American Electric Power Company Inc. AEP reported first quarter 2014 operating earnings of $1.15 per share, beating the Zacks Consensus Estimate of 91 cents by 26.4%. The quarterly figure also improved a whopping 43.8% from the year-ago adjusted profit of 80 cents per share. The upbeat performance was supported by favorable weather and high power prices.
CMS Energy Corp. CMS posted first-quarter 2014 earnings per share of 75 cents, surpassing the Zacks Consensus Estimate of 64 cents by 17.2%.
Entergy Corp. ETR reported first-quarter 2014 earnings of $2.29 per share, beating the Zacks Consensus Estimate by 8.5%.
Zacks Rank
Ameren presently holds a Zacks Rank #3 (Hold).
With a market cap of $9.94 billion, this St. Louis based company generates and distributes electricity and natural gas to residential, commercial, industrial and wholesale end markets in Missouri and Illinois.
With its recent exit from the merchant generation business – Ameren Energy Resources Company – Ameren is now more focused on its rate-regulated utilities. Now that the divestiture is complete, we expect Ameren to witness modestly rising earnings at its core utilities, primarily in Illinois, over the long term.
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