American Electric Power Co.'s /quotes/zigman/217343/quotes/nls/aep AEP -0.39% second-quarter profit dropped 6.6% as the utility company reported flat revenue, while profit from its utility operations logged a double-digit percentage slump.
Earlier this month American Electric had said it expected to retire its 585-megawatt coal-fueled Muskingum River Plant Unit 5 in Beverly, Ohio, in 2015, citing the costs to comply with environmental regulations and soft market conditions. The company had revealed that it plans to record a write-down of $150 million to $170 million in the second quarter.
On Thursday, Chief Executive Nicholas K. Akins said strong results from the company's regulated businesses, including transmission, are offsetting some of the negative earnings impacts from the transition to competition in Ohio.
"Despite signs of economic recovery in some states, we continue to experience load decline in portions of our service area primarily due to lagging industrial demand," he said. "However, industrial demand contributes lower margins and has less of an earnings impact than other load categories."
For the quarter, American Electric Power posted a profit of $338 million, or 69 cents a share, compared with the year-ago's profit of $362 million, of 75 cents a share. The latest quarter included a pretax impairment charge of $154 million tied to the Muskingum River plant, partly offset by a favorable $80 million tax credit. Operating earnings were down at 73 cents from 77 cents a share.
Revenue was flat at $3.6 billion.
Analysts polled by Thomson Reuters most recently expected earnings of 74 cents a share on revenue of $3.64 billion.
The profit from utility operations slumped 39% to $221 million, while from transmission operations this surged to $18 million from $8 million. Meanwhile the AEP River operations swung to a loss of $9 million f