Ameren Posts Third Quarter 2009 Earnings

Nov 05, 2009 (Close-Up Media via COMTEX) -- AEE | Quote | Chart | News | PowerRating -- Ameren Corp. announced third quarter 2009 net income in accordance with generally accepted accounting principles (GAAP) of $227 million, or $1.04 per share, compared to third quarter 2008 GAAP net income of $204 million, or 97 cents per share.

In a release on October 30, the Company noted that, excluding certain items in each year, Ameren recorded third quarter 2009 core (non-GAAP) net income of $255 million, or $1.16 per share, compared to third quarter 2008 core (non-GAAP) net income of $246 million, or $1.17 per share.

Factors favorably affecting core (non-GAAP) third quarter 2009 earnings per share, as compared to the same period in 2008, included utility rate adjustments in Illinois and Missouri, lower operations and maintenance expenses, as well as the revenue-leveling effect of natural gas rate redesign in the Illinois regulated utility segment. Offsetting factors included lower electricity sales in the regulated utilities and lower margins in the merchant generation segment, as a result of much cooler summer weather and economic conditions. Higher interest expense and increased average common shares outstanding also impacted comparative results.

"I am pleased to report that our third quarter core earnings per share were just one cent less than those of the year-ago quarter despite much cooler summer weather and the weak economy," said Thomas R. Voss, president and chief executive officer of Ameren Corp. "Our entire management team is keenly focused on laying a foundation on which we can build and deliver shareholder value in the years to come. Key steps have been taken in this direction over the past few months, including reevaluating and reducing planned expenditures, further strengthening our financial profile and right-sizing our organization. We are also seeking to recover increased costs in our regulated businesses and positioning our merchant generation business to weather current power market conditions and benefit from an expected eventual recovery. We intend to lead the way to a secure energy future for our customers and our communities.

"With our most significant earnings' quarters behind us, we are narrowing our 2009 core earnings per share guidance to a range of $2.70 to $2.90 from our prior range of $2.70 to $3.05. Our new core guidance range reflects reduced sales due to much cooler-than-normal third quarter weather and continued weak economic conditions, as well as dilution from our third quarter common equity offering. The impact of these factors is partially offset by reduced operating and interest expenses, as compared to our prior guidance."

In the third quarter of 2009, at Ameren's regulated utilities, much cooler summer weather and the economic slowdown led to a 10 percent decrease in kilowatthour sales to residential customers and a 3 percent decrease in kilowatthour sales to commercial customers, compared to the year-ago quarter. These sales changes were more modest on a weather-normalized basis, with residential sales declining an estimated 2 percent and commercial sales declining an estimated 1 percent. Cooling degree-days in the 2009 third quarter were 18 percent below those of the 2008 third quarter and 23 percent below normal. The weak economy continued to affect kilowatthour sales by Ameren's regulated utilities to their industrial customers. These sales declined 13 percent from the year-ago quarter, excluding the impact of reduced sales to AmerenUE's largest customer, the Noranda Aluminum, Inc., smelter plant in New Madrid, Mo. Noranda's plant sustained damage because of a power interruption on non-Ameren-owned power lines during a severe January 2009 ice storm. Including Noranda, electric sales to industrial customers declined 18 percent in the third quarter of 2009, as compared to the year-ago quarter.

The following items were excluded from third quarter 2009 and third quarter 2008 core (non-GAAP) earnings, as applicable:

-- Net costs associated with the Illinois comprehensive electric rate

relief and customer assistance settlement agreement (reached in 2007)

reduced net income by $4 million in the third quarter of 2009 and by

$6 million in the third quarter of 2008.

-- Net effects of mark-to-market activity decreased net income by $11

million in the third quarter of 2009 and by $36 million in the third

quarter of 2008.

-- Employee separation programs and the retirement of two generating

units at the merchant generation segment's Meredosia Power Plant

reduced net income by $13 million in the third quarter of 2009.

2009 Earnings Guidance

As previously mentioned, Ameren has updated its expectations for full-year 2009 earnings. GAAP earnings for 2009 are now expected to be in the range of $2.57 to $2.77 per share, compared to the prior range of $2.63 to $2.98 per share. Core (non-GAAP) earnings are now expected to be in the range of $2.70 to $2.90 per share, compared to the prior range of $2.70 to $3.05. The 2009 core (non-GAAP) earnings guidance excludes an estimated 7 cents per share negative impact from the 2007 settlement agreement among parties in Illinois to provide comprehensive electric rate relief and customer assistance and an estimated 6 cents per share negative impact from the costs of employee separation programs and generating unit retirements. Any net unrealized mark-to-market gains or losses will affect GAAP earnings, but are excluded from GAAP and core (non-GAAP) earnings guidance because the company is unable to reasonably estimate the impact of any such gains or losses.

With assets of $24 billion, Ameren serves approximately 2.4 million electric customers and almost one million natural gas customers in a 64,000-square-mile area of Missouri and Illinois. Ameren owns a diverse mix of electric generating plants strategically located in its Midwest market with a generating capacity of more than 16,300 megawatts.

((Comments on this story may be sent to newsdesk@closeupmedia.com))

More News:   Market Updates | Stock Alerts | All Trading News | Stock Index