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American Electric (AEP) Beats on Q3 Earnings, Hikes EPS View

American Electric Power Co., Inc . AEP reported third-quarter 2018 operating earnings per share (EPS) of $1.25, surpassing the Zacks Consensus Estimate of $1.23 by 1.6%.

The bottom line also improved 13.6% from $1.10 reported a year ago.

The strong earnings performance in the quarter was driven by favorable weather conditions and investments to enhance service support.

Including one-time items, the company reported GAAP earnings of $1.17 per share compared with the year-ago quarter's figure of $1.11.

Total Revenues

American Electric's third-quarter revenues of $4.3 billion increased 4.9% from $4.1 billion in the year-ago quarter. The reported figure also surpassed the Zacks Consensus Estimate of $4.26 million by 0.9%.

Quarterly Highlights

Operating expenses in the reported quarter were $2,039.4 million compared with $1,704.1 million a year ago.

Operating income in the quarter was $668.6 million, down 31.4% from $975.1 million a year ago.

Segmental Performance

Vertically Integrated Utility Operations : Operating earnings in the quarter increased 20.2% to $344.2 million from $286.3 million in the year-ago quarter.

Transmission & Distribution Utilities : Operating earnings were $145.2 million in the quarter, up 0.8% from $144 million a year ago.

AEP Transmission Holdco : This segment generated an operating income of $73.3 million, down 2.9% from $75.5 million recorded in the third quarter of 2017.

Generation and Marketing : Operating earnings were $5.3 million, down 84.3% from $33.7 million in the year-ago quarter.

Corporate & Other : Operating earnings were $9.6 million, up 84.6% from $5.2 million in the year-ago quarter.

American Electric Power Company, Inc. Price, Consensus and EPS Surprise

American Electric Power Company, Inc. Price, Consensus and EPS Surprise | American Electric Power Company, Inc. Quote

Financial Update

As of Sep 30, 2018, American Electric had $788.3 million in cash and cash equivalents compared with $214.6 million as of Dec 31, 2017.

Long-term debt was $20.89 billion as of Sep 30, 2018, compared with $19.42 billion as of Dec 31, 2017.

Cash flow from operations was $3,932.6 million in the first nine months of 2018 compared with $3,124.2 million in the prior-year period.

Guidance

American Electric has increased and narrowed its 2018 operating earnings guidance to $3.88-$3.98 per share from the previous projection of $3.75-$3.95 per share.

Zacks Rank

American Electric carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Other Utility Releases

DTE Energy Company DTE reported third-quarter 2018 operating earnings per share of $2.13, which outpaced the Zacks Consensus Estimate of $1.74 by 22.4%. The reported figure also improved 43.9% from the year-ago quarter's figure of $1.48.

NextEra Energy NEE reported third-quarter 2018 adjusted earnings of $2.18 per share, beating the Zacks Consensus Estimate of $2.17 by 0.46%. Moreover, earnings were up 17.8% on a year-over-year basis.

Upcoming Release

Edison International EIX is scheduled to report third-quarter 2018 results on Oct 30. The company carries a Zacks Rank #3.

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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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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