American Electric Power Company Inc. Earnings Cheat Sheet: Third Straight Quarter of Rising Profit

S&P 500 (NYSE:SPY) component American Electric Power Company Inc (NYSE:AEP) reported its results for the third 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 for the Third Quarter

Results: Net income for the electric utilities company rose to $928 million ($1.93 per share) vs. $556 million ($1.16 per share) in the same quarter a year earlier. This marks a rise of 66.9% from the year earlier quarter.

Revenue: Rose 5.8% to $4.3 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AEP reported adjusted net income of $1.17 per share. By that measure, the company beat the mean estimate of $1.13 per share. It fell short of the average revenue estimate of $4.61 billion.

Quoting Management: “We had solid financial performance in the third quarter, with load created by warmer-than-normal weather,” said Michael G. Morris, AEP’s chairman and chief executive officer. “The historic heat in the West and periods of extremely hot weather in the East stressed the nation’s power system, but AEP’s generation and wires – and our men and women who maintain them – were up to the challenge. “We had several positive developments in the quarter,” Morris said. “The Texas Supreme Court ruled in our favor in our appeal of state regulatory decisions regarding the recovery of stranded costs associated with the transition to retail competition. The court required the Public Utility Commission of Texas to use actual capacity auction prices, which is what we had used in our original filing a decade ago. We expect to receive the cash associated with this decision in first-quarter 2012.

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than twofold and in the first quarter, the figure rose 2.6%.

Revenue has risen the past four quarters. Revenue increased 7.4% to $3.61 billion in the second quarter. The figure rose 4.5% in the first quarter from the year earlier and climbed 4.6% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of 73 cents versus a mean estimate of net income of 76 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 46 cents per share to 43 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $3.13 a share to $3.12 over the last ninety days.

Competitors to Watch: FirstEnergy Corp. (NYSE:FE), Duke Energy Corporation (NYSE:DUK), Cleco Corporation (NYSE:CNL), PPL Corporation (NYSE:PPL), The Southern Company (NYSE:SO), Entergy Corporation (NYSE:ETR), DPL Inc. (NYSE:DPL), Westar Energy, Inc. (NYSE:WR), NextEra Energy, Inc. (NYSE:NEE), and Constellation Energy Group, Inc. (NYSE:CEG).

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(Source: Xignite Financials)