Ameren (AEE) To Report Q4 Earnings: Is A Beat In The Cards?

Ameren Corporation (NYSE:AEE) is scheduled to release fourth-quarter and full-year 2018 results before the opening bell on Feb 14. In the last reported quarter, the utility delivered a positive earnings surprise of 17.19%. Also, it outpaced estimates in each of the trailing four quarters, the average being 15.40%.

Let’s see how things are shaping up prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Ameren is likely to beat on earnings in the fourth quarter. This is because a stock needs to have both — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Ameren has an Earnings ESP of +6.92%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Ameren currently sports a Zacks Rank #1, which increases the predictive power of ESP.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Factors at Play

Ameren’s operational regions witnessed above-average cold winter with new record low temperatures for most of the fourth quarter. This indicates at increased demand for electricity by the utility’s customers to keep themselves warm, which in turn must have boosted the company’s quarterly top line.

However, the company’s ongoing energy efficiency efforts are expected to reduce its electric sales. We may expect the soon-to-be-reported results to duly reflect these factors.

On the bottom-line front, Ameren Missouri expects that its year-to-date third-quarter earnings growth may not continue in the quarter to be reported. Moreover, higher-than-normal energy center scheduled outage at Ameren Missouri might hurt the company’s overall earnings in the fourth quarter.

Considering these factors, the Zacks Consensus Estimate for Ameren’s earnings is pegged at 32 cents, mirroring an 18% decline from the year-ago reported quarter’s tally.

Stocks That Warrant a Look

Here are a few operators from the same sector with the right combination of elements to beat estimates this time around.

Public Service Enterprise Group Incorporated (NYSE:PEG) is scheduled to release fourth-quarter results on Feb 27. It has an Earnings ESP of +1.82% and a Zacks Rank #3.

Pinnacle West Capital Corp (NYSE:PNW) is set to release fourth-quarter results on Feb 22. It has an Earnings ESP of +4.17% and a Zacks Rank of 2.

The Southern Company (NYSE:SO) is scheduled to release fourth-quarter results on Feb 20. It has an Earnings ESP of +9.86% and a Zacks Rank #2.

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