American Electric Power Company Inc.
) reported first quarter 2014 operating earnings of $1.15 per
share, beating the Zacks Consensus Estimate of 91 cents by 26.4%.
The quarterly figure also improved a whopping 43.8% from the
year-ago adjusted profit of 80 cents per share. The upbeat
performance was supported by favorable weather and high power
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On a GAAP basis, the utility's first quarter 2014 earnings were
on par with the operating number. In the year-ago quarter GAAP
earnings were 75 cents per share taking into account a one-time
charge of 5 cents.
American Electric Power's quarterly operating revenue was $4.6
billion, surpassing the Zacks Consensus Estimate as well as the
year-ago number of $3.8 billion by 21.1%.
Fuel & Other Consumables used for electric generation stood
at $1.2 billion in the quarter, up 13.3% from the year-earlier
level of $1.0 billion.
Total expenses in the reported quarter were $1.80 billion, up
10.4% year over year from $1.63 billion.
American Electric clocked net income of $560 million in the
reported quarter, up from $387 million a year ago.
Vertically Integrated Utility Operations:
Operating earnings in the quarter surged 37.6% year over year to
$278.0 million. This improvement was due to the positive impact
of rate changes, higher off-system sales margins, and colder
Transmission & Distribution Operations:
Operating earnings experienced a major boost, improving 12.8%
year over year to $97.0 million in the quarter, attributable to
the positive effect of rate changes as well as severe cold
AEP Transmission Holdco:
This unit generated income of $24 million during the quarter
versus $13 million in the first quarter 2013, backed by increased
Generation and Marketing:
Operating earnings were $163 million, up 83.1% from $89 million
in the first quarter 2013. The improvement reflects robust fleet
performance and favorable power prices.
AEP River Operations:
This segment registered an income of $3 million versus a year-ago
loss of $2 million. This reflects improvements in river
conditions and in grain export demand.
The segment incurred a wider loss of $5 million during the
quarter when compared with a loss of $1 million in the year-ago
American Electric Power's cash and cash equivalents as of Mar 31,
2014 were $292 million versus $118 million as of Dec 31, 2013.
Long-term debt was $16.5 billion as of Mar 31, 2014 versus $16.8
billion as of Dec 31, 2013.
American Electric Power's cash flow from operating activities in
the first quarter 2014 was $1.1 billion compared with $0.8
billion in the first quarter 2013. The company increased its
capital spending for transmission projects by $200 million to
$1.7 billion. Of the total increase, $140 million went to
Transmission Holding Co. and $60 million was allocated to the
utility operating companies.
American Electric Power, one of the largest electric utilities in
the U.S., raised its 2014 GAAP earnings guidance to $3.35-$3.55
per share from its earlier expectation of $3.20-$3.40 per share.
The company's operating earnings guidance is in the range of
$3.30-$3.60 per share for 2015 and $3.45-$3.85 per share for
) posted robust first-quarter 2014 earnings. Its operational
earnings came in at $2.29 per share in the quarter, beating the
Zacks Consensus Estimate by 8.5%. Quarterly earnings increased a
considerable 143.6% year over year on the back of higher
wholesale electricity prices owing to a frigid winter and
pipeline infrastructure constraints in the Northeast U.S.
CMS Energy Corp.
) posted first-quarter 2014 earnings per share of 75 cents both
on an adjusted and GAAP basis. The quarterly figure surpassed the
Zacks Consensus Estimate of 64 cents by 17.2% and increased 41.5%
on a year-over-year basis.
American Electric exceeded both our top- and bottom-line
estimates for the reported quarter. The uptrend was driven by
strong performances across the board.
We believe American Electric Power's ongoing investments in
transmission projects and in regulated as well as non-regulated
businesses are set to drive its earnings in the future.
American Electric Power is also focused on expanding its line of
businesses. In Feb 2014, its unit AEP River Operations started a
new Liquids Division with the receipt of the first of 20 tank
barges. The company will transport liquid commodities, including
petrochemicals and agricultural chemicals, which will definitely
boost its profits.
In addition, heightened industrial activity in its service
territories is expected to drive an additional 270 megawatt of
fresh demand. This will to a large extent compensate for the loss
of Ormet, an aluminum smelter in Ohio, which shut down in October
American Electric Power current holds a Zacks Rank #3 (Hold).
Other better-ranked stocks in the industry include Entergy and
NRG Energy, Inc.
), both sporting a Zacks Rank #1 (Strong Buy).