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American Electric (AEP) Posts In-Line Q4 Earnings, Sales Miss

Zacks Equity Research

American Electric Power Co., Inc. AEP reported fourth-quarter 2018 operating earnings per share (EPS) of 72 cents, in line with the Zacks Consensus Estimate.

The bottom line declined 15.3% from 85 cents per share in the year-ago quarter.

For 2018, American Electric’s earnings were $3.95 per share, up from $3.68 in the year-ago period. The full-year earnings figure also came in line with the Zacks Consensus Estimate of $3.95.

Total Revenues

American Electric’s fourth-quarter revenues of $3.8 billion were in line with the top line figure in the year-ago quarter. The reported figure however missed the Zacks Consensus Estimate of $3.96 billion by 4.2%.

In 2018, total revenues increased 5% year over year from $15.43 billion to $16.20 billion. Revenues also surpassed the Zacks Consensus Estimate of $15.81 billion by 2.46%.

Quarterly Highlights

Operating expenses in the reported quarter were $1,912.8 million compared with $1,725 million a year ago.

Operating income in the quarter was $583.1 million, down 27.3% from $802.4 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

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter declined to $130.5 million from $179.4 million a year ago.

Transmission & Distribution Utilities: Operating earnings were $132.1 million in the quarter, up from $123.9 million a year ago.

AEP Transmission Holdco: This segment generated operating income of $92.1 million, up from $78.5 million recorded in the fourth quarter of 2017.

Generation and Marketing: Operating earnings were $35.1 million, up from $24.5 million in the year-ago quarter.

Corporate & Other: Operating losses were $34.9 million, against the operating profit of $13.8 million registered in the year-ago quarter.

Financial Update

As of Dec 31, 2018, American Electric had cash and cash equivalents of $234.1 million compared with $214.6 million as of Dec 31, 2017.

Long-term debt was $21.65 billion as of Dec 31, 2018, compared with $19.42 billion as of Dec 31, 2017.

Cash flow from operations was $5,223.2 million at the end of 2018 compared with $4,270.4 million at the end of 2017.

2019 Guidance

American Electric has reaffirmed its 2019 operating earnings guidance in the range of $4.00–$4.20. The company also reaffirms 5-7% operating earnings growth rate for 2019.

Zacks Rank

American Electric currently carries a Zacks Rank #4 (Sell).

Upcoming Sector Releases

Ameren Corporation AEE is scheduled to report fourth-quarter 2018 results on Feb 14. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CenterPoint Energy, Inc. CNP is scheduled to report fourth-quarter 2018 results on Feb 28. The company carries a Zacks Rank #2 (Buy).

NextEra Energy NEE is scheduled to report fourth-quarter 2018 results on Jan 25. The company carries a Zacks Rank #3 (Hold).

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