Ameren (AEE) To Report Q2 Earnings: What's In The Cards?
Zacks Investment Research | Jul 30, 2019 11:21PM ET
Ameren Corporation (NYSE:AEE) is scheduled to release second-quarter 2019 results on Aug 2, before the opening bell. In the last reported quarter, this utility delivered a positive earnings surprise of 11.43%.
Moreover, the company’s earnings outpaced estimates in three of the trailing four quarters, the average beat being 9.73%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Ameren’s service territories witnessed severe weather conditions during most of the second quarter of 2019, characterized by severe storms, tornadoes and excessive flooding. Particularly, in Illinois, inclement weather damaged more than 230 transmission and distribution structures and poles along a wide band stretching more than 200 miles across. Cumulatively, this may have caused electricity outages, thereby disrupting smooth supply of power.
As a result, temperature is likely to hurt Ameren’s revenues in the to-be-reported quarter. In line with this, the Zacks Consensus Estimate for the company’s second-quarter revenues, pegged at $1.43 billion, indicates a decline of 8.4% from the year-ago reported figure.
On first-quarter earnings call, the company announced in anticipation that the Callaway refueling and maintenance outage in Spring 2019 might affect Ameren Missouri’s earnings in the second quarter. In fact, the company projected its second-quarter earnings to be dented by approximately 30 cents per share year over year due to the outage and the impact of a rough weather.
Moreover, the company expected the first-quarter timing differences related to income tax expense in Ameren Missouri and Ameren Parent to induce quarterly variations, which may hit its bottom line in the soon-to-reported quarter.
Considering these unfavorable forecasts, the Zacks Consensus Estimate for Ameren’s earnings in the second quarter is pegged at 75 cents, suggesting a 22.7% decline from the year-ago quarter’s reported figure.
During the quarter, Ameren Missouri entered into an agreement with Tradewind Energy to acquire a third wind generation facility in Missouri, after construction. We expect to get further updates on this agreement once the upcoming quarterly results are out.
Earnings Whispers
Our proven model does not conclusively show that Ameren is likely to beat on earnings in the second quarter. This is because a stock needs to have both — a positive Zacks Investment Research
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