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Ameren (AEE) Up 5.4% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Ameren (AEE - Free Report) . Shares have added about 5.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ameren due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ameren Q3 Earnings Top Mark on Higher Electric Sales

Ameren Corporation's third-quarter 2018 earnings of $1.50 per share from continuing operations surpassed the Zacks Consensus Estimate of $1.28 by 17.2%. The bottom line also improved 21% year over year, primarily driven by higher Ameren Missouri electric retail sales.

Also, infrastructure investments made in Ameren Transmission and Ameren Illinois Electric Distribution contributed to this bottom-line growth.

Barring one-time items, the company reported GAAP earnings of $1.45 per share compared with $1.18 in the prior-year period.

Total Revenues

Total revenues came in at $1,724 million, which inched up 0.1% year over year owing to higher electric and natural gas sales volumes.

Highlights of the Release

Ameren’s total electricity sales volumes expanded 2.6% to 21,568 million kilowatt hours (kWh) compared with 21,029 million kWh in the year-ago quarter. However, gas volumes contracted 3.5% to 28 million dekatherms.

Total operating expenses summed $1,191 million, up 3.2% year over year.

Interest expenses were $101 million compared with $97 million a year ago.

Financial Condition

Ameren reported cash and cash equivalents of $11 million as of Sep 30, 2018 compared with $10 million at 2017 end.

As of Sep 30, 2018, long-term debt totaled $7,614 million compared with $7,094 million as of Dec 31, 2017.

In first nine months of 2018 cash from operating activities amounted to $1,686 million compared with $1,647 million in the year-earlier period.

Guidance

Ameren has raised its 2018 earnings per share outlook to the range of $3.35-$3.45 from $3.15-$3.35, projected earlier.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -23.53% due to these changes.

VGM Scores

Currently, Ameren has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ameren has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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