It has been about a month since the last earnings report for American Electric Power (AEP). Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AEP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Electric Q2 Earnings Beat, Revenues Rise Y/Y
American Electric Powerreported second-quarter 2024 adjusted earnings per share (EPS) of $1.25, which beat the Zacks Consensus Estimate of $1.23 by 1.6%. The bottom line also improved 10.6% from $1.13 recorded in the year-ago quarter.
The company reported GAAP earnings of 64 cents per share compared with the year-ago quarter’s figure of $1.01.
Total Revenues
Operating revenues of $4.73 billion rose 5.6% from the year-ago quarter’s level of $4.48 billion.
The company reported GAAP revenues of $4.58 billion, which improved 4.7% year over year.
The Zacks Consensus Estimate is pegged at $4.54 billion.
Segmental Performance
Vertically Integrated Utility Operations: Adjusted earnings for the quarter declined to $244.8 million from $260.4 million in the year-ago period.
Transmission & Distribution Utilities: Adjusted earnings totaled $215.3 million, up from $156.5 million in the year-ago quarter.
AEP Transmission Holdco: This segment generated adjusted earnings of $208.9 million, up from $196.5 million in the year-ago quarter.
Generation and Marketing: Adjusted earnings amounted to $61 million, down from $66.1 million in the year-ago quarter.
All Other: The segment reported a loss of $68 million compared with a loss of $97.3 million in the year-ago period.
Highlights of the Result
Electricity sales volume from Vertically Integrated Utilities increased 2% year over year, while the same from Transmission & Distribution Utilities improved 12%.
Total expenses in the second quarter of 2024 were $3.62 billion, up 2.6% from the year-ago level.
Interest expenses amounted to $465.6 million, up 1.2% from the year-ago quarter’s figure.
Guidance
American Electric reiterated its 2024 operating earnings guidance. It still expects to generate earnings in the band of $5.53-$5.73 per share. The Zacks Consensus Estimate for 2024 earnings is pegged at $5.59 per share, which lies lower than the mid-point of the company’s projected range.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
Currently, AEP has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AEP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
AEP belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, CMS Energy (CMS), has gained 4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
CMS Energy reported revenues of $1.61 billion in the last reported quarter, representing a year-over-year change of +3.3%. EPS of $0.66 for the same period compares with $0.75 a year ago.
For the current quarter, CMS Energy is expected to post earnings of $0.78 per share, indicating a change of +27.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for CMS Energy. Also, the stock has a VGM Score of C.
5 Stocks Set to Double
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Today, See These 5 Potential Home Runs >>American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report
CMS Energy Corporation (CMS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
