Before the bell,
) posted third quarter 2013 earnings from continuing operations
of $1.25 per share, beating the Zacks Consensus Estimate of $1.23
by 1.6%. However, the quarterly result came in below the year-ago
profit of $1.28 by 2.3% due to lower electric sales volumes owing
to a cooler summer.
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Total operating revenue in the reported quarter was down 4.2%
year over year to $1,638.0 million. Reported revenue also failed
to meet the Zacks Consensus Estimate of $1,869.0 million.
Electric revenue decreased 4.6% while gas revenue increased 0.8%,
on a year-over-year basis.
In Mar 2013, Ameren entered into an agreement to divest its
merchant generation business, Ameren Energy Resources Company or
AER, to an affiliate of
). 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.
As a result of this transaction - which is scheduled to close in
the fourth quarter of this year - the company has classified the
results of this business as discontinued operations in its
Ameren Missouri Segment:
Segmental earnings were $238.0 million, up from $236.0 million
earned in the year-ago quarter. The increase mainly reflects
electric service rate hike, effective from Jan 2013, along with
controlled cost management.
Ameren Illinois Segment:
Segmental earnings stood at $77.0 million in the quarter versus
$71.0 million in the year-earlier quarter, backed by higher
Illinois electric delivery earnings.
Parent Company and Other:
The segment incurred a loss of $10 million from continuing
operations for the reported quarter, compared with earnings of $2
million for the third quarter of 2012. The weak numbers primarily
reflect a decrease in asset retirement obligation costs in the
prior-year period and higher income tax expense in the
This division includes interest expense and some other costs
which were previously set for the merchant generation business,
and other costs historically not allocated to Ameren's business
Ameren reported cash and cash equivalents of $169.0 million at
the end of the third quarter, compared with $184.0 million at
2012 end. Long-term debt (including current maturities) decreased
to $5,274.9 million from $5,802.4 million at year-end 2012.
The debt-to-capitalization ratio stood at 44.0% in the reported
quarter. The company generated cash of approximately $1,314.0
million from operating activities in the first nine months of the
year compared with $1,312.0 million generated in the year-ago
Ameren lowered the high end of its earnings from continuing
operations guided range to $2.00 to $2.10 from its prior
expectation of $2.00 to $2.15 per share for 2013. This reduced
expectation reflects the adverse impact of cooler-than-normal
third quarter 2013 temperatures on electric sales volumes.
Ameren presently retains a Zacks Rank #3 (Hold). Stocks worth
accumulating now are
UNS Energy Corporation
American Electric Power Company Inc.
). While UNS Energy holds a Zacks Rank #1 (Strong Buy), American
Electric Power carries a Zacks Rank #2 (Buy).