News Column

Ameren earnings surge upward

August 6, 2014

By Tony Reid, Herald & Review, Decatur, Ill.

Aug. 06--ST. LOUIS -- Ameren Corp turned in high-voltage second quarter results on Tuesday with net income jumping by more than 40 percent and sizzling past the estimates of industry analysts.

The St. Louis-based parent company of Ameren Illinois announced it had generated $150 million or 62 cents per share, compared to $105 million and 44 cents a share earned at this time last year. The latest results beat analyst estimates by 4 cents per share.

The only power fade came in Ameren Illinois' numbers, where the utility reported second quarter earnings of $28 million, down from the 2013 second quarter earnings of $31 million. Ameren said part of the reason was a set-back in profits allowed under a new state system for regulating earnings on electricity delivery rates in Illinois.

But the setback is likely to be only temporary: the utility has already filed a new rate hike request that will be worth $206 million in 2015 if it is approved in December.

Commenting on the overall numbers, Ameren Corp's management said its net income from continuing operations for the six months ending in June had hit $247 million or $1.02 per share. That blew away the results for the six months that ended in June 2013, when net income totaled $159 million or 66 cents per share. A winter of record cold and warmer early summer temperatures in 2014 helped drive the numbers, the company said.

But Ameren also claimed its underlying strategy was also juicing the results in a positive direction. The company and its Ameren Illinois utility have concentrated heavily on upgrading the state and regional power delivery grid, spending which allows it to earn hefty returns.

The company claims the strategy is a win-win for everyone: customers get a more reliable and sophisticated power grid, and Ameren and its shareholders can count on fixed healthy income to reward their effort and investment.

"Continued execution of our strategy is producing solid financial and operating performance for the benefit of our customers and shareholders," said Warner L. Baxter, Ameren's chairman, president and CEO.

"Over ther remainder of this year, we will remain focused on successfully completing several key infrastructure projects, as well as managing our costs in a disciplined fashion."

Ameren Corp now predicts earnings per share for 2014 of $2.30 to $2.50, and for eanrings to grow at a 7 to 10 percent compound annual rate through 2018.|(217)421-7977

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Source: Herald & Review (Decatur, IL)

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