8-K: Ameren Announces 2024 Results, Affirms 2025 Guidance, and Issues Long-Term Growth Outlook

Ameren Corporation reported increased 2024 earnings, affirmed its 2025 earnings guidance, and provided a long-term EPS growth forecast.

Summary

• Ameren Corporation announced its 2024 financial results, with GAAP diluted earnings per share (EPS) of $4.42, compared to $4.38 in 2023.
• Adjusted diluted EPS for 2024 was $4.63, up from $4.38 in the previous year.
• The company affirmed its 2025 earnings guidance range of $4.85 to $5.05 per diluted share.
• Ameren issued a diluted EPS compound annual growth rate guidance of 6% to 8% for 2025 through 2029, using the 2025 guidance midpoint as a base.
• 2024 net income attributable to common shareholders was $1,182 million, compared to $1,152 million in 2023.
• Adjusted net income attributable to common shareholders for 2024 was $1,237 million.
• The company's performance was driven by strong operating results, infrastructure investments, and disciplined cost management.
• Earnings were positively impacted by new electric service rates at Ameren Missouri, higher electric retail sales at Ameren Missouri, and new natural gas service rates at Ameren Illinois.
• These gains were partially offset by increased interest expense at Ameren Missouri and Ameren Parent, as well as a lower return on equity (ROE) at Ameren Illinois Electric Distribution.
• Ameren Missouri's earnings were $559 million (GAAP) and $604 million (adjusted), compared to $545 million in 2023.
• Ameren Transmission's earnings were $323 million (GAAP) and $333 million (adjusted), compared to $296 million in 2023.
• Ameren Illinois Electric Distribution's earnings were $234 million, compared to $258 million in 2023.
• Ameren Illinois Natural Gas's earnings were $149 million, compared to $134 million in 2023.
• Ameren Parent reported a loss of $83 million, compared to a loss of $81 million in 2023.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with increased earnings, affirmed guidance, and long-term growth projections. While there are some negative factors, the overall tone is optimistic and suggests a stable financial position.

Positives

• Ameren achieved higher earnings in 2024 due to increased infrastructure investments and disciplined cost management.
• New electric and natural gas service rates contributed to increased earnings.
• Higher electric retail sales at Ameren Missouri across all customer classes positively impacted earnings.
• Ameren Transmission saw increased earnings due to infrastructure investments.
• Ameren Illinois Natural Gas experienced improved earnings from new delivery service rates and lower operations and maintenance expenses.

Negatives

• Increased interest expense at Ameren Missouri and Ameren Parent partially offset earnings gains.
• A lower ROE at Ameren Illinois Electric Distribution negatively impacted earnings.
• Ameren Parent experienced a loss of $83 million in 2024.
• A charge for additional mitigation relief related to settlement of the New Source Review and Clean Air Act proceeding associated with the Rush Island Energy Center decreased 2024 earnings by $45 million.
• A charge for customer refunds related to the Federal Energy Regulatory Commission's (FERC) October 2024 order on the Midcontinent Independent System Operator, Inc.'s (MISO) allowed base ROE for the periods of November 2013 through February 2015 and September 2016 through October 2024, decreased 2024 earnings by $10 million.

Risks

• Regulatory, judicial, and legislative actions could impact earnings.
• The company's ability to control costs and recover investments is subject to regulatory frameworks.
• Changes in customer usage patterns and technological advances could affect energy prices and demand.
• The cost and availability of fuel and purchased power are subject to market volatility.
• Cyberattacks and data security risks pose a threat to operational control and data security.
• Weather conditions and natural disasters can impact the company and its customers.
• Labor disputes and workforce reductions could affect operations and costs.
• The impacts of the Russian invasion of Ukraine and conflicts in the Middle East, related sanctions imposed by the United States and other governments, and any broadening of these or other global conflicts, including potential impacts on the cost and availability of fuel, natural gas, enriched uranium, and other commodities, materials, and services.

Future Outlook

Ameren expects diluted earnings per share to grow at a 6% to 8% compound annual rate from 2025 through 2029, using the 2025 guidance range midpoint of $4.95 per share as the base.

Management Comments

• 'We made significant strides in executing our strategy during 2024 for the benefit of our customers, communities, shareholders and the environment,' said Martin J. Lyons Jr., chairman, president and chief executive officer of Ameren Corporation.
• Lyons also stated, 'We remain focused on execution of our strategy, which includes making investments to modernize the energy grid and power growth with a mix of reliable and cleaner energy resources.'

Industry Context

Ameren's focus on infrastructure investments and cleaner energy resources aligns with broader industry trends towards grid modernization and decarbonization.

Comparison to Industry Standards

• Ameren's projected rate base growth of 9.2% annually from 2024-2029 is competitive with other large utilities focusing on infrastructure upgrades.
• Companies like NextEra Energy (NEE) and Duke Energy (DUK) are also investing heavily in renewable energy and grid modernization.
• Ameren's long-term EPS growth guidance of 6-8% is comparable to the growth targets of its peers in the regulated utility sector.

Stakeholder Impact

• Shareholders can expect continued growth and returns based on the company's guidance.
• Customers may benefit from modernized energy grid and cleaner energy resources.
• Communities will benefit from the company's investments in infrastructure and economic development.
• The environment will benefit from the company's transition to cleaner energy resources.

Next Steps

• Ameren will conduct a conference call for financial analysts on February 14 to discuss 2024 earnings and 2025 earnings guidance.
• Ameren Missouri filed a change to its preferred Integrated Resource Plan.

Key Dates