American Electric Power Earnings: Powering Ahead

Falling revenue did not prevent S&P 500 (NYSE:SPY) component American Electric Power Company Inc (NYSE:AEP) from reporting a profit boost in the second quarter. American Electric Power is a public utility holding company that provides electric service, consisting of generation, transmission, and distribution, to its retail customers through subsidiaries.

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American Electric Power Company Inc Earnings Cheat Sheet

Results: Net income for American Electric Power Company Inc rose to $362 million (75 cents per share) vs. $352 million (73 cents per share) in the same quarter a year earlier. This marks a rise of 2.8% from the year-earlier quarter.

Revenue: Fell 0.2% to $3.6 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: American Electric Power Company Inc beat the mean analyst estimate of 72 cents per share. Analysts were expecting revenue of $3.57 billion.

Quoting Management: “We had solid financial performance in the second quarter, driven by warmer than normal weather and our continued disciplined approach to controlling costs,” said Nicholas K. Akins, president and chief executive officer. “The economy in our service territories has shown some signs of improvement, with growth in our western states outpacing that in our eastern states.”In operations, severe storms swept through our eastern states on June 29, causing considerable damage,” Akins said. “At the peak we had more than 1.4 million customers in five states without power, an unprecedented outage number for AEP. We’re proud of the efforts of our employees, contractors and crews from other utilities who worked long hours in extreme heat and difficult conditions to restore power to our customers.”

Key Stats:

The company has now seen its net income increase for three consecutive quarters. In the first quarter, net income rose 9.9% and in the fourth quarter of the last fiscal year, the figure rose 75.7%.

The company beat estimates last quarter after meeting expectations in the first quarter with net income of 80 cents per share.

Revenue has declined for two quarters in a row. In the first quarter, revenue declined 2.8% to $3.63 billion from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from $1.07 a share to $1.06 over the last ninety days. The average estimate for the fiscal year is $3.04 per share, down from $3.09 ninety days ago.

Competitors to Watch: FirstEnergy Corp., Duke Energy Corporation, Cleco Corporation, PPL Corporation, The Southern Company, Entergy Corporation, DPL Inc., Westar Energy, Inc., NextEra Energy, Inc., and Constellation Energy Group, Inc.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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