American Electric Updates Earnings and Capex Guidance - Analyst Blog

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Columbus, OH based American Electric Power Co., Inc. ( AEP ) provided an update on its earnings guidance for 2015 and 2016, increasing the former and reaffirming the latter. The company also provided a projection for capital expenditure for the period 2015-2017.

One of the largest electric utilities in the U.S., American Electric Power, increased the low end of its operating earnings guidance for 2015 to a range of $3.40-$3.60 from a previous projection of $3.30-$3.60 per share. For 2016, the company reaffirmed its guidance in a band of $3.45- $3.85 per share.

As for its capital expenditure budget, American Electric Power expects capital investment of $4.4 billion for 2015, $3.8 billion for 2016 and finally around $3.9 billion for 2017.

In the third quarter earnings release, American Electric narrowed its 2014 operating earnings guidance to $3.40−$3.50 per share from $3.35-$3.55 per share earlier.

This Zacks Rank #3 (Hold) company remains focused on growing its regulated operations by investing as much as 96% of its planned budget in it for the next three years. American Electric also aims to concentrate on process improvement in order to minimize operational costs and meet challenges placed by 2016 capacity market results and arrested economic recovery.

In addition, American Electric through its subsidiary AEP Transmission Holding Co. and its regulated utility companies intends to invest around $4.8 billion for the development of its transmission business over the next three years.

Recent Earnings Update

American Electric Power reported third-quarter 2014 operating earnings of $1.01 per share, missing the Zacks Consensus Estimate of $1.03 by 1.9%. The quarterly figure also declined 8.2% from $1.10 per share a year ago. The weak performance was due to mild summer temperatures.

Third-quarter operating revenues were $4.3 billion, short of the Zacks Consensus Estimate of $4.6 billion by 6.2% and lower than the year-ago number of $4.2 billion by 3%.

Other Stocks to Consider

Other better-ranked stocks in the electric utility space include Black Hills Corporation ( BKH ), PG&E Corporation ( PCG ) and Unitil Corp. ( UTL ). All three stocks currently sport a Zacks Rank #1 (Strong Buy).

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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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