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American Electric (AEP) Q2 Earnings Beat, Revenues Down Y/Y

Zacks Equity Research

American Electric Power Co., Inc. AEP reported second-quarter 2019 adjusted earnings per share (EPS) of $1.00, surpassing the Zacks Consensus Estimate of 98 cents by 2%.

However, the bottom line fell 1% from $1.01 per share in the year-ago quarter.

The company reported GAAP earnings of 93 cents per share compared with the year-ago quarter’s $1.07.

Total Revenues

American Electric’s second-quarter revenues of $3.60 billion missed the Zacks Consensus Estimate of $4.15 billion by 13.6%. The reported figure also declined 10.2% from the year-ago quarter’s revenues of $4 billion.

Quarterly Highlights

Operating expenses in the reported quarter were $1,861.9 million compared with $1,912.6 million a year ago.

Operating income in the quarter was $585.5 million, down 21% from $741.4 million in the year-ago quarter.

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter decreased to $186.9 million from $276.8 million a year ago.

Transmission & Distribution Utilities: Operating earnings were $131.3 million in the quarter, up from $114 million a year ago.

AEP Transmission Holdco: This segment generated operating income of $154.6 million, up from $101.1 million reported in the second quarter of 2018.

Generation and Marketing: Operating earnings were $27.4 million, up from $26.5 million in the year-ago quarter.

Corporate & Other: Operating losses were $6.6 million compared with operating losses of $20.1 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. price-consensus-eps-surprise-chart | American Electric Power Company, Inc. Quote

Financial Update

As of Jun 30, 2019, American Electric had cash and cash equivalents of $210.5 million compared with $234.1 million as of Dec 31, 2018.

Long-term debt was $24.17 billion as of Jun 30, 2019, compared with $21.65 billion as of Dec 31, 2018.

Cash flow from operations was $1,800.8 million during the first half of 2019 compared with $2,006.8 million in the first half of 2018.

2019 Guidance

American Electric has reaffirmed its 2019 operating earnings guidance of $4.00-$4.20 per share.

Zacks Rank

American Electric currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Utility Releases

Dominion Energy D is scheduled to report second-quarter 2019 results on Jul 31. The Zacks Consensus Estimate for earnings in the quarter to be reported is pegged at 79 cents.

Exelon Corp. EXC is slated to report second-quarter 2019 results on Aug 1. The Zacks Consensus Estimate for earnings in the quarter is pegged at 63 cents.

A Recent Utility Release

NextEra Energy NEE reported second-quarter 2019 adjusted earnings of $2.35 per share, beating the Zacks Consensus Estimate of $2.28 by 3.1%. Moreover, earnings were up 12.9% on a year-over-year basis.

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