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American Electric Power Beats on Q3 Earnings, Lifts View

American Electric Power Co., Inc.AEP reported third-quarter 2015 operating earnings of $1.06 per share, beating the Zacks Consensus Estimate of $1.00 by 6%.

Earnings also increased 5% from $1.01 per share in the year-ago quarter, supported by continued investments in its regulated businesses.

American Electric Power Company Inc. - Earnings Surprise | FindTheBest

Total Revenue

American Electric Power's third-quarter revenues of $4,565 million improved 6.1% from $4,302 million in the year-ago quarter.

Highlights of the Release

Operating expenses incurred in the reported quarter inched up nearly 2.7% year over year to $1,898 million.

Operating income in third-quarter 2015 was $981 million, up 6.1% from $925 million a year ago.

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter increased 25.1% to $274 million from $219 million a year ago. The upside was driven by favorable rate impacts and weather, partially offset by reduced off-system sales and higher operations and maintenance expenses.

Transmission & Distribution Utilities: Operating earnings were $113 million in the quarter, up 22.8% from $92 million a year ago due to an unfavorable regulatory provision recorded in the third quarter of 2014.

AEP Transmission Holdco: This segment generated operating income of $46 million, up 7% from $43 million in the third quarter of 2014, backed by increased transmission investment.

Generation and Marketing: Operating earnings were $93 million, down 20.5% from $117 million in the third quarter of 2014. The decrease was due to lower capacity revenue, partially offset by favorable hedging activity.

AEP River Operations: The segment registered operating income of $4 million compared with $11 million a year ago, primarily due to loss incurred in a transportation-related equity investment.

Financial Update

As of Sep 30, 2015, American Electric Power had $178.0 million in cash and cash equivalents compared with $163.0 million as of Dec 31, 2014.

Long-term debt was $17.6 billion as of Sep 30, 2015 compared with $16.1 billion as of Dec 31, 2014.

Guidance

American Electric Power raised its 2015 operating earnings guidance to the range of $3.67-$3.77 per share from the prior range of $3.50-$3.65 per share.

Zacks Rank

American Electric Power currently carries a Zacks Rank #2 (Buy).

Upcoming Peer Releases

DTE Energy Company DTE is scheduled to report third-quarter 2015 results on Oct 23, 2015.

Consolidated Edison, Inc. ED is scheduled to report third-quarter 2015 results on Nov 5, 2015.

Ameren Corporation AEE is expected to report its third-quarter 2015 results on Nov 6, 2015.

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AMEREN CORP (AEE): Free Stock Analysis Report

AMER ELEC PWR (AEP): Free Stock Analysis Report

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DTE ENERGY CO (DTE): 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.


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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