We are downgrading our recommendation on American Electric Power
Company, Inc. to Neutral from Outperform following its
lower-than-expected third-quarter results. However, ongoing
investments in transmission projects and regulated, as well as
non-regulated, businesses are set to drive its earnings in the
future. Moreover, the company will benefit from attractive growth
opportunities in the shale-rich regions of Texas and Ohio. The
company focuses on providing reliable services to its customers
through technological improvements. The company is equally focused
on maximizing shareholder value.
Columbus, OH-based American Electric Power Company, Inc. is a
public utility holding company which, through directly and
indirectly owned subsidiaries, generates, transmits and distributes
electricity, natural gas and other commodities. The company is one
of the largest integrated utilities in the U.S., serving more than
5 million customers in 11 states with nearly 38,000 MW of
generating capacity and nearly 40,000 miles of electricity
transmission system network. Its service area covers Arkansas,
Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee,
Texas, Virginia and West Virginia. The company derives its revenues
mainly from power generation. Approximately 60% of the company's
power is generated from coal, 23% from natural gas and oil, 5% from
nuclear energy, and the remaining 12% from wind, water, pumped
storage and other sources.
The company mainly operates under the following business
segments: Utility Operations, Transmission Operations, AEP River
Operations, and Generation and Marketing.
American Electric Power's public utility subsidiaries are
Appalachian Power Company (APCo), Columbus Southern Power Company
(CSPCo), Indiana Michigan Power Company (I&M), Kentucky Power
Company (KPCo), Kingsport Power Company (KgPCo), Ohio Power Company
(OPCo), Public Service Company of Oklahoma (PSO), Southwestern
Electric Power Company (SWEPCo), AEP Texas Central Company (TCC),
AEP Texas North Company (TNC), Wheeling Power Company (WPCo) and
AEP Generating Company (AEGCo).
American Electric Power also owns a service company subsidiary,
American Electric Power Service Corporation (AEPSC). AEPSC provides
accounting, administrative, information systems, engineering,
financial, legal, maintenance and other services.
American Electric Power Co. Inc. (AEP): Read the
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