Before the bell,
) reported its fourth quarter and full year 2012 results. In the
reported quarter, the company with adjusted earnings of 14 cents
a share (flat year over year) missed the Zacks Consensus Estimate
of 22 cents. Performance in the reported quarter was affected by
a decline in its Illinois' earnings, largely due to a lower
allowed ROE for electric delivery service, and a decline in
merchant generation segment earnings, primarily reflecting lower
These factors were largely offset by increased Ameren Missouri
earnings due to the absence of a refueling outage at the Callaway
Nuclear Energy Center in the fourth quarter of 2012, compared to
the scheduled refueling outage that occurred during the fourth
quarter of 2011.
On a reported basis, the company digested a loss of $4.76 per
share in the fourth quarter versus earnings of 10 cents in the
year-ago period. The difference between the reported and adjusted
earnings per share in the quarter was due to asset impairments
and other charges of $4.87; and loss from net unrealized
mark-to-market activity of 3 cents.
Full-year 2012 adjusted earnings came in at $2.42 per share, a
penny less than the Zacks Consensus Estimate of $2.43. This also
came below full year 2011 earnings of $2.56 per share.
Ameren's loss per share for full-year 2012 on a reported basis
came in at $4.01 versus earnings per share of $2.15 in full year
2011. The variance in full year 2012 between reported and
adjusted earnings came from asset impairment and other charges of
$6.42, and a loss from net unrealized mark-to-market activity of
Net revenues in the quarter fell to $1.51 billion versus $1.58
billion in the year-ago quarter, falling behind the Zacks
Consensus Estimate of $1.76 billion. In the reported quarter
Electricity revenue fell to $1.21 billion versus $1.31 billion in
the year-ago period. Gas revenue however rose to $299 million
from $270 million in the year-ago period.
Full-year 2012 revenue was $6.83 billion versus the Zacks
Consensus Estimate of $7.21 billion. Full-year revenue also came
below the $7.53 billion generated in full year 2011.
Full-Year 2012 Segment Performance
Ameren Missouri Segment:
Segmental adjusted earnings for 2012 were $414 million, compared
with 2011 adjusted earnings of $359 million. The increase in
adjusted earnings reflected the full year effect of a 2011
electric rate increase as well as lower operations and
maintenance expense, reflecting the absence of a refueling outage
at the Callaway Nuclear Energy Center in 2012 and reduced
The earnings comparison also benefited from the favorable FERC
order related to a disputed power purchase agreement. These
factors were partially offset by higher depreciation expense, a
higher effective income tax rate and lower electric sales
volumes. The lower electric sales volumes were largely due to
2012 winter temperatures that were warmer than those experienced
Ameren Illinois Segment:
Segmental adjusted earnings for 2012 were $139 million, compared
with $193 million in 2011. The decrease in earnings reflects a
lower allowed ROE, reflecting low Treasury bond yields, and
required non-recoverable program donations, related to 2012
implementation of formula ratemaking for electric delivery
In addition, natural gas sales volumes fell due to warmer 2012
winter temperatures, compared to 2011. The required
non-recoverable donations included a one-time pretax $7.5 million
contribution to the Illinois Science & Energy Innovation
Trust related to participation in the state's electric delivery
service formula ratemaking framework. The above factors were
partially offset by increased natural gas delivery rates,
effective from Jan 2012.
Merchant Generation Segment:
Segmental earnings were $42 million, compared with $72 million in
2011. The decline in earnings reflects lower power prices and
higher fuel costs partially offset by lower depreciation and
operations and maintenance expenses.
Ameren reported cash and cash equivalents of $209 million at
year-end 2012, compared with $255 million at year-end 2011.
Long-term debt decreased slightly to $6.63 billion from $6.68
billion at year-end 2011. The company generated cash of
approximately $1.69 billion from operating activities compared
with approximately $1.88 billion generated in full year 2011.
St. Louis-based Ameren Corporation is a holding company which
operates in the generation and distribution of electricity and
natural gas to residential, commercial, industrial and wholesale
end markets in Missouri and Illinois. Through its utility
subsidiaries the company distributes electricity to 2.4 million
customers and natural gas to approximately 1 million customers in
Missouri and Illinois.
Ameren operates in three segments: Missouri Regulated,
Illinois Regulated and Non-rate-regulated Generation.
AMEREN CORP (AEE): Free Stock Analysis Report
DTE ENERGY CO (DTE): Free Stock Analysis
PIKE ELECTRIC (PIKE): Free Stock Analysis
TRANSALTA CORP (TAC): Free Stock Analysis
To read this article on Zacks.com click here.
Ameren expects 2013 GAAP and adjusted earnings in the range of
$2.00 to $2.20 per share.
Our bullish outlook for Ameren is supported by consistent
performances across its solid base of stable utility operations
in the Midwestern market, as well as its focus on cost
minimization, the strong balance sheet, its above-industry
average dividend yield and relatively cheap earnings-based
valuation. The company presently retains a short-term Zacks Rank
#1 (Strong Buy).
Other Stocks to Consider
Other stocks to consider are
DTE Energy Company
Pike Electric Corporation
), all carrying a Zacks Rank #1 (Strong Buy).