Before the bell,
) reported first quarter 2012 results. During the quarter, pro
forma earnings per share were 22 cents, in line with the Zacks
Consensus Estimate. Reported earnings fell short of the year-ago
figure by 3 cents.
The decline in year-over-year results reflect lower regulated
utility electric and natural gas sales and decreased margins at the
Merchant Generation segment, partially offset by increased electric
utility rates in Missouri, increased natural gas delivery rates in
Illinois and lower non-fuel operations and maintenance
During the quarter, GAAP loss per share was $1.66 compared to
earnings per share of 29 cents in the year-ago period. The
significant variation of $1.88 per share between GAAP loss and pro
forma earnings was due to a non-cash asset impairment charge of
$1.55 related to Ameren Energy Resources Generating Company's Duck
Creek Energy Center, the reduction of tax benefit of 36 cents
related to asset impairment and annual estimated effective income
tax rate, and a gain on net unrealized mark-to-market activity of 3
In the reported quarter, net revenues declined 12.9% to $1.66
billion. The figure also fell short of the Zacks Consensus Estimate
by $134 million. Revenue from Electric sales was down 10.9% year
over year to $1.3 billion, while revenue from Gas declined 19.8%
year over year.
Volume sales of electricity to native load utility customers
decreased from 27.8 billion Kilowatt-hour (KWh) to 24.3 billion.
During the quarter, the segment reported pro forma earnings of $20
million compared with $21 million in the year-ago quarter. The
year-over-year decline reflects lower electric sales to native load
customers partially offset by increased electric rates that were
effective from July 2011 onward and lower non-fuel operations and
maintenance expenses. The company reported GAAP earnings of $21
million, flat year over year.
The company generated pro forma net income of $26 million, down
from $33 million in the year-ago quarter due to a decrease in
electric sales and natural gas sales. These negatives were,
however, partially offset by realization of revenue related to
Illinois electric delivery formula ratemaking as well as increased
natural gas delivery rates, effective January 2012. The company
reported GAAP earnings of $27 million compared with $33 million in
the year-ago quarter.
The segment generated pro forma earnings of $14 million, up from
$11 million in the year-ago period. The year-over-year
increase was driven by a lower effective core income tax rate,
partially offset by decreased segment margins due to lower market
prices for electricity. GAAP loss was $363 million compared to
earnings of $20 million in the year-ago quarter.
At the end of March 31, 2012, Ameren reported cash and cash
equivalents of $208 million compared with $573 million in the
year-ago period. As of March 31, 2012, long-term debt, net
decreased minimally to $6.7 billion versus $6.9 billion at the end
of first quarter 2011.
During the reported quarter, net cash provided by operating
activities was $392 million compared with $560 million in the first
quarter of 2011. Capital expenditure in the quarter was $282
million, up from $231 million the comparable year-ago period.
For fiscal 2012, the company expects pro forma earnings to be in
the range of $2.20 to $2.50 per share. Including impairment
charges, it expects GAAP EPS to be in the range of 65 cents to 95
cents per share.
Today, its competitor,
The AES Corporation
) reported first quarter 2012 adjusted earnings per share of 37
cents, 9 cents above the Zacks Consensus Estimate Earnings also
comfortably surpassed the year-ago figure of 24 cents per
Ameren's stable and regulated electric power operations in the
Midwest generate a relatively stable and growing earnings stream.
We expect future growth to be driven by improved plant operations,
focus on cost management, rate relief and installation of emissions
reduction equipment (scrubbers) at its generation plants. However,
the company is negatively impacted by the impairment charges
related to Ameren Energy Resources Generating Company's Duck Creek
Also, its predominantly coal-based generation assets and pending
regulatory cases are a matter of concern. The company presently
retains a short-term Zacks #3 Rank (Hold) that corresponds with our
long-term Neutral recommendation on the stock.
St. Louis-based Ameren Corporation is a holding company which
engages in the generation and distribution of electricity and
natural gas and serves residential, commercial, industrial and
wholesale end-markets in Missouri and Illinois.
AMEREN CORP (AEE): Free Stock Analysis Report
AES CORP (AES): Free Stock Analysis Report
To read this article on Zacks.com click here.