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Ameren Misses Q2 Earnings

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Before the bell, Ameren Corp. (AEE - Free Report) reported second quarter 2013 earnings from continuing operations of 44 cents per share, below the Zacks Consensus Estimate of 49 cents. The quarterly result also plunged 33.3% from the year-earlier earnings of 66 cents.

The lower number mainly reflects the result of a planned nuclear refueling outage, impacts of a regulatory decision in 2012 and a court decision in 2013, accompanied by a milder weather.

Operational Performance

Total operating revenue in the reported quarter inched up 0.1% to $1,403.0 million. However, revenue failed to meet the Zacks Consensus Estimate of $1,502.0 million. Electric revenue decreased 2.2% to $1,228.0 million while gas revenue increased 19%, on a year-over-year basis.

On Mar 2013, Ameren entered into an agreement to divest its merchant generation business, Ameren Energy Resources Company or AER, to an affiliate of Dynegy Inc. . 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 financial statements.

Segmental Performance

Ameren Missouri Segment: Segmental earnings were $84 million, down considerably from $143.0 million earned in the year-ago quarter. The decrease mainly reflects lower electric sales volumes as this year's early summer temperatures were cooler than last year's warmer-than-normal temperatures.

The Callaway refueling outage expenses, the absence in 2013 of a 2012 benefit resulting from the FERC purchased power agreement order and the charge resulting from the May 2013 Missouri Court of Appeals FAC decision also adversely affected the result.

Ameren Illinois Segment: Segmental earnings stood at $31.0 million in the quarter versus $32 million in the year-earlier quarter.

Financial Condition

Ameren reported cash and cash equivalents of $150.0 million in the second quarter 2013, compared with $184.0 million at 2012 end. Long-term debt decreased to $5,274.0 million from $5,802.0 million at year-end 2012.

The debt-to-capitalization ratio stood at 44.7% in the reported quarter. The company generated cash of approximately $768.0 million from operating activities in the first half of the year compared with $761.0 million generated in the year-ago period.


Ameren now anticipates earnings from continuing operations in the range of $2.00 to $2.15 per share for 2013 versus its previous expectation of $2.00 to $2.20. This reduced expectation reflects the second quarter 2013 charge resulting from the May 2013 Missouri Court of Appeals FAC decision.

Zacks Rank

Ameren presently retains a Zacks Rank #3 (Hold). Stocks worth accumulating now are Huaneng Power International, Inc.  (HNP - Free Report) and Integrys Energy Group, Inc. , both carrying a Zacks Rank #1 (Strong Buy).

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