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Topic: Growth Stocks

Lower gas and electricity prices weigh on this Wall Street stock’s earnings

Ameren Corp., symbol AEE on New York, sells electricity and natural gas to 3.4 million customers in Illinois and Missouri.

In the three months ended March 31, 2011, the Wall Street stock’s earnings fell 36.8%, to $60.0 million, or $0.25 a share, from $95.0 million, or $0.40 a share, a year earlier. These figures exclude unusual items, mainly gains and losses on hedging contracts that the company uses to lock in its fuel prices.

The lower earnings were mainly due to lower prices for electricity and natural gas. Higher fuel and transportation costs, plus higher income taxes in Illinois, also hurt its earnings. Moreover, severe storms added to the company’s costs, and cut electricity sales during widespread power outages.

Revenue was flat in the quarter, at $1.9 billion. Business and homeowners used 4% less power, due to milder temperatures in the quarter. However, electricity sales to industry rose by 7%, as the U.S. continued to recover from the recession.

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