American Electric Power Company Inc. (AEP) released stable fourth quarter results before the opening bell yesterday. In the reported quarter, the company beat the Zacks Consensus Estimate of 46 cents by four cents with an EPS of 50 cents. The uptrend was witnessed in fiscal 2009 performance where EPS of $2.97; comfortably beat the Zacks Consensus EPS Estimate of $2.95. However, the numbers for the reported period fell short of the year-ago quarter and fiscal 2008 by 9 cents and 27 cents respectively. The variance in EPS with the year-ago periods came from a dilutive effect of additional shares outstanding, which reduced earnings for fiscal 2009 by $0.42 per share and $0.09 per share for the reported quarter.
Revenue rose marginally to $3.3 billion in the reported quarter from $3.2 billion in the year-ago period. Results were boosted by higher rates in Virginia, Indiana and Oklahoma and the implementation of fuel cost recovery in Ohio. However, this was partially offset by a warmer climate in the reported quarter and a tepid economy. The downturn in the economy affected the demand from industrial customers the most. Industrial retail sales fell 11.1% year-over-year, while residential retail sales declined 2.9%. Also residential retail sales fell marginally by 1.1%. However, this was offset by 3.1% higher miscellaneous retail sales and 3.7% higher wholesale electricity sales.
Ongoing earnings remained stagnant at $238 million in the reported quarter compared to $237 million in the year-ago quarter. Ongoing earnings from Utility Operations increased by $25 million to $207 million in the fourth quarter of fiscal 2009 compared with the year ago quarter. This was due to increased retail rates throughout the utility’s service territory, which were somewhat offset by lower sales to industrial customers and increased expenses.
AEP’s River Operations’ ongoing earnings however fell $9 million to $25 million as compared to the fourth quarter of fiscal 2009. This was due to lower grain rates and reduced imports, which weakened freight demand. This was partially offset by lower operating expenses.
Earnings from the Generation and Marketing segment decreased to $8 million in the fourth quarter of 2009 from $22 million in the year-ago quarter, primarily because of reduced gross margins from marketing activities.
American Electric Power reaffirmed its ongoing guidance range for fiscal 2010 in the range of $2.80 – $3.20. This is in line with the Zacks Consensus EPS Estimate of $3.07 for fiscal 2010.
Columbus, Ohio-based American Electric Power is one of the largest public utility holding companies, catering to approximately 5.2 million customers spread over 11 states.
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