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Ameren (AEE) Prepares for Q3 Earnings: What to Expect?

Ameren CorporationAEE will release third-quarter 2015 financial results before the market opens on Nov 6. In the previous quarter, the utility had reported a positive earnings surprise of 13.28%. Let's see how things are turning out for the third quarter.

Factors at Play

Ameren, based in St. Louis, MO, continues to invest systematically in growth projects and infrastructure upgrades. The company's investment in smart meter installation will help in improving its service reliability. It operates a rate-regulated business and has a stable earnings base with 2.4 million electric customers and more than 900,000 natural gas customers in a 64,000-square-mile area. Focus on its regulated utilities will help to meet projected compound annualized earnings growth of 7-10% between 2013 and 2018.

Again, a return to normal temperatures from last year's mild weather is expected to have a positive effect on earnings. In the third quarter particularly, the company expects normal weather to boost earnings by an estimated 9 cents per share compared with the year-ago quarter. During the second half of 2015, earnings are also expected to be driven by the company's infrastructure investments in FERC-regulated electric transmission and Illinois electric delivery services.

Earnings Whispers

Our proven model shows that Ameren is likely to beat earnings because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to beat estimates, and Ameren has the right mix.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +1.53%. This is because the Most Accurate estimate of $1.33 is higher than the Zacks Consensus Estimate of $1.31. This is a meaningful indicator of a likely positive earnings surprise for the company.

Zacks Rank: Ameren has a Zacks Rank #2. The combination of Ameren's Zacks Rank #2 and +1.53% ESP makes us positive of a likely earnings beat this season.

Conversely, the Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement, especially when the company is witnessing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Duke Energy Corporation DUK has an Earnings ESP of +0.66% and a Zacks Rank #3. It will report results on Nov 5.

WEC Energy Group, Inc. WEC has an Earnings ESP of +3.39% and a Zacks Rank #3. It will report results on Nov 4.

Pattern Energy Group Inc. PEGI has an Earnings ESP of +28.57% and a Zacks Rank #3. The company is scheduled to report its results on Nov 5, 2015.

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AMEREN CORP (AEE): Free Stock Analysis Report

WEC ENERGY GRP (WEC): Free Stock Analysis Report

DUKE ENERGY CP (DUK): Free Stock Analysis Report

PATTERN ENERGY (PEGI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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