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Ameren (AEE) to Report Q4 Earnings: What's in the Cards?

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Ameren Corporation (AEE - Free Report) is set to release fourth-quarter 2017 results on Feb 16, before the market opens.

Last quarter, the utility reported a negative earnings surprise of 5.34%. Moreover, it lagged the Zacks Consensus Estimate in two of the last four quarters, with an average miss of 1.05%.

Let’s see how things are shaping up at the company prior to this announcement.

Factors at Play

Per Ameren’s third-quarter earnings call, fourth-quarter 2017 earnings are expected to be impacted by expenses associated with the fourth quarter Callaway nuclear refueling and maintenance outage.

However, the company’s earnings are likely to increase on the back of strong rate-based growth and disciplined financial management. In line with this, the Zacks Consensus Estimate for Ameren’s fourth-quarter earnings of 33 cents per share reflects an annual growth of 153.9%.

Moreover, we expect the company’s yet-to-be reported quarter’s result to duly reflect the increase in revenue recognition, resulting from the Future Energy Jobs Act.  Also the company expects to incur low interest expenses driven by the refinancing of debt in 2017, which is likely to get reflected in the upcoming results, partially.

Further, the company’s service territories witnessed almost normal temperatures during the fourth quarter. So we may expect weather condition to have a positive influence on the company’s revenues.

 

Ameren Corporation Price and EPS Surprise

 

Ameren Corporation Price and EPS Surprise | Ameren Corporation Quote

 

Earnings Whispers

Our proven model doesn’t conclude that Ameren is likely to beat estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to be able to beat estimates.

Zacks ESP: Ameren has an Earnings ESP of -3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ameren has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are a few operators in the electric utility space that you may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Edison International (EIX - Free Report) will report next quarterly results on Feb 22. The company has an Earnings ESP of +1.44% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CenterPoint Energy, Inc. (CNP - Free Report) has an Earnings ESP of +2.65% and a Zacks Rank #2. The company is scheduled to report next quarterly results on Feb 22.

Public Service Enterprise Group (PEG - Free Report) has an Earnings ESP of +0.72% and a Zacks Rank #2. The company is scheduled to report next quarterly results on Feb 23.

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