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Why Is Ameren (AEE) Up 5.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Ameren (AEE - Free Report) . Shares have added about 5.5% 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 drivers.

Ameren Q1 Earnings Beat Estimates, Revenues Fall Y/Y

Ameren Corporation’s first-quarter 2019 earnings of 78 cents per share from continuing operations surpassed the Zacks Consensus Estimate of 70 cents by 11.4%. The bottom line also improved by 25.8% from the year-ago quarter’s tally of 62 cents.

Total Revenues

Total revenues came in at $1,556 million in the reported quarter, which declined 1.8% year over year owing to lower electric sales volumes.

Highlights of the Release

Ameren’s total electricity sales volumes declined 3.3% to 19,217 million kilowatt hours (kWh) compared with 19,869 million kWh in the year-ago quarter. However, gas volumes expanded 6.5% to 82 million dekatherms.

Total operating expenses summed $1,268 million, down 3.35% year over year. Interest expenses were $97 million compared with $101 million a year ago.

The company’s operating income increased 5.5% to $288 million from $273 million in the year-ago quarter.

Segment Results

Ameren Missouri segment reported operating income of $39 million in the first quarter compared with $38 million in the year-ago quarter.

Ameren Illinois Electric Distribution segment reported operating income of $36 million in the first quarter compared with $33 million in the year-ago quarter.

Ameren Illinois Natural Gas segment reported operating income of $57 million compared with $42 million in the year-ago quarter.

Ameren Transmission segment reported operating income of $44 million in the first quarter compared with $37 million in the year-ago quarter.

Financial Condition

Ameren reported cash and cash equivalents of $8 million as of Mar 31, 2019 compared with $16 million at 2018 end.

As of Mar 31, 2019, long-term debt totaled $8,221 million compared with $7,859 million as of Dec 31, 2018.

In the first quarter of 2019, cash from operating activities amounted to $387 million compared with $258 million in the first quarter of  2018.

Guidance

Ameren reaffirms its 2019 guidance. The company expects its earnings to be in the range of $3.15-$3.35 per share, which is projected to grow  at a 6-8% compound annual rate from 2018 through 2023. Currently the Zacks Consensus Estimate for the company’s 2019 earnings is pegged at  $3.27 per share, higher than the mid-point of the company provided guidance.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

Currently, Ameren has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 #3 (Hold). We expect an in-line return from the stock in the next few months.


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