First-quarter 2016 earnings results were "solid"for Ameren Corp.,despite a few setbacks, according to Chairman, President and CEO Warner Baxter.Baxter said on the company's May 11 earnings call that the company is still ontrack to deliver within its 2016 earnings guidance range of $2.40 per share to$2.60 per share.
Ameren's earnings decline reflected lower electric andnatural gas sales volumes, mainly caused by milder winter temperatures,according to Baxter.
"These milder temperatures lowered earnings by anestimated $0.10 per share compared to 2015," Baxter said, adding that theyear-over-year earnings comparison was also reduced as a result of lowerelectric sales to the company's largest customer, , whichidled its remaining smelter potline in mid-March.
Noranda filed for bankruptcyin February after announcing in January plans to close down its primary smelter unless it wasable to obtain a lower electricity rate from Ameren Corp. subsidiary AmerenMissouri, known legally as UnionElectric Co.
Although Ameren on May 10 reported a slight year-over-year drop to itsfirst-quarter 2016 net income attributable to common shareholders of $105million, or 43 cents per share, the result beat the S&P Global MarketIntelligence normalized consensus EPS estimate of 37 cents per share. Netincome was $108 million, or 45 cents per share, in the first quarter of 2015.
The company generated $1.43 billion in revenues, comprisedof $1.10 billion from the electric segment and $332 million from the gassegment. In comparison, Ameren recorded $1.56 billion in first-quarter 2015revenues, comprised of $1.14 billion from the electric segment and $413 millionfrom the gas segment. Operating income was $220 million for the 2016 firstquarter, compared with $256 million in the prior-year period. On a segmentbasis, Ameren Missouri posted first-quarter 2016 earnings of $14 million,compared to $41 million in the 2015 quarter, while subsidiary reportedfirst-quarter 2016 earnings of $59 million, compared to $53 million in the 2015first quarter.
Baxter noted on the call that the company is focused onexecuting its strategic plan, which he said will deliver long-term value to itscustomers and shareholders. The plan included around $170 million of capitalspent on FERC jurisdictional related projects in the first quarter.
Construction on the first of the Illinois Rivers Project'snine transmission line segments is finished and construction of three othersegments in two of three river crossings are expected to be complete later in2016, according to Baxter. Moreover, two of the project's 10 substations arealready in service, he said.
In February 2014, the Illinois Commerce Commissiongranted final sitingapproval to the 345-kV transmission line, which when completed, will spanacross the Mississippi River from Palmyra, Mo., to Quincy, Ill., and intoIndiana.
Ameren is currently acquiring right-of-way for its SpoonRiver project inNorthwestern Illinois and plans to start line construction later in 2016,Baxter said, adding that the project's new substation should be complete by theend of 2016.
Additionally, Baxter noted that in April, the MissouriPublic Service Commission conditionallyapproved a certificate of convenience and necessity for its planned Mark Twaintransmission project. The 345-kV, approximately 95-mile transmission line wasgranted the certificate pending approvals by the counties through which itwould cross. The company plans to obtain the approvals from the five countiesand begin right-of-way acquisition soon, according to Baxter.
All three projects have been designated by as multivalue projects.
"When completed, these projects will deliversignificant customer benefits, including improved reliability and access to cleanergeneration, including wind power from the western and northern parts of theMISO region," Baxter said.