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American Electric Power (AEP) Beats Q4 Earnings Estimates

Zacks Equity Research

American Electric Power Co., Inc. AEP reported fourth-quarter 2016 operating earnings of 67 cents per share, beating the Zacks Consensus Estimate of 55 cents by 21.8%.

Earnings also improved 39.6% year over year, supported by continued strategic investments in its regulated segments.

For 2016, American Electric Power’s earnings were $3.94 per share, up from $3.69 a year ago.

Total Revenue

American Electric Power’s fourth-quarter revenues of $3,782.6 million increased 2.4% from $3,692.7 million in the year-ago quarter. The reported figure also exceeded the Zacks Consensus Estimate of $2,831 million.

In 2016, total revenues decreased 3.1% year over year to $16,370.2 million.

Quarterly Highlights

Operating expenses incurred in the reported quarter were $1,851.7 million compared with $1,922.8 million a year ago.

Operating income in fourth-quarter 2016 was $571.3 million, up 15.6% from $494.1 million a year ago.

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 increased to $150.6 million from $116.8 million a year ago.

Transmission & Distribution Utilities: Operating earnings were $77.2 million in the quarter, up from $63.9 million a year ago.

AEP Transmission Holdco: This segment generated an operating income of $58.8 million, up from $44.6 million recorded in the fourth quarter of 2015.

Generation and Marketing: Operating earnings were $47.8 million, up from $7.8 million in the fourth quarter of 2015.

Financial Update

As of Dec 31, 2016, American Electric Power had $210.5 million in cash and cash equivalents compared with $176.4 million as of Dec 31, 2015.

Long-term debt was $17.38 billion as of Dec 31, 2016, compared with $17.74 billion as of Dec 31, 2015.

Cash flow from operations was $4.5 billion for 2016 compared with $4.7 billion in the prior year.

Guidance

American Electric Power has provided its 2017 operating earnings guidance in the range of $3.55–$3.75.

Zacks Rank

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

Recent Peer Releases

DTE Energy Co. DTE is expected to report fourth-quarter 2016 results on Feb 8. The Zacks Consensus Estimate for earnings is pegged at 84 cents.

Entergy Corp. ETR is slated to report fourth-quarter 2016 results on Feb 15 and the Zacks Consensus Estimate for its bottom line stands at 18 cents.

CMS Energy Corp. CMS is scheduled to report fourth-quarter 2016 results on Feb 2. The Zacks Consensus Estimate for earnings stands at 28 cents.

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