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What's in Store for American Electric (AEP) in Q4 Earnings?

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·4 min read
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American Electric Power Company, Inc AEP is slated to release its fourth-quarter 2021 results on Feb 24, 2022 before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 0.69%. American Electric has a trailing four-quarter earnings surprise of 1.61%, on average.

Factors to Note

During most of the fourth quarter, AEP’s service territories witnessed mixed weather patterns. While some parts observed cooler-than-normal temperatures along with slight snowfall, other parts had warm weather and extreme drought conditions.

Furthermore, some parts of its service territories experienced significant precipitation levels throughout the quarter, resulting in wet weather conditions. Also, severe weather conditions, along with tornadoes, may have had disrupted the smooth flow of electricity to its customers. This is likely to have negatively impacted the company’s overall revenues in the to-be-reported quarter.

However, favorable rate changes across its multiple jurisdiction might have resulted in increased transmission revenues and higher off-system sales. This, in turn, is likely to have bolstered the fourth quarter’s top line.

Also, the rebounding commercial and industrial load due to the economic recovery observed over the past few months might have favorably contributed to the company’s performance in the quarter to be reported.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $4.02 billion, suggesting growth of 11.3% from the year-ago quarter.

However, American Electric’s service territories, which experienced severe weather patterns, including tornadoes in the fourth quarter, may have witnessed infrastructural damage. This, in turn, may have increased the company’s operating expenses for restoration and repairing, which is likely to have weighed on its bottom line in the to-be-reported quarter.

However, the company continues to manage its costs diligently. Such cost management initiatives may have partially offset the unfavorable impacts of the aforementioned expenses. Also, higher margins, along with lower net interest expenses and income taxes, may have aided the company’s performance in the fourth quarter.

The Zacks Consensus Estimate for fourth-quarter earningsis pegged at 94 cents per share, indicating growth of 8.1% from the prior-year reported figure.

American Electric Power Company, Inc. Price and EPS Surprise

American Electric Power Company, Inc. Price and EPS Surprise
American Electric Power Company, Inc. Price and EPS Surprise

American Electric Power Company, Inc. price-eps-surprise | American Electric Power Company, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for American Electric this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: The company’s Earnings ESP is +0.43%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AEP carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Another Stock to Consider

Here is one Utility player that you may want to consider as it has the right combination of elements to post an earnings beat this season:

Public Service Enterprise Group Incorporated PEG has an Earnings ESP of +0.37% and a Zacks Rank #3.

It boasts a long-term earnings growth rate of 3.6%. The Zacks Consensus Estimate for Public Service Enterprise Group’s fourth-quarter sales and earnings is pegged at $2.50 billion and 68 cents per share, respectively. PEG has a four-quarter average earnings surprise of 4.57%.

Upcoming Releases

AES Corp AES has an Earnings ESP of -1.75% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for its fourth-quarter earnings, pegged at 43 cents per share, implies a decline of 10.4% from the prior-year quarter’s tally.

AES Corp. boasts a long-term earnings growth rate of 7.2%. AES has a four-quarter earnings surprise of 4.50%.

Edison International EIX has an Earnings ESP of 0.00% and a Zacks Rank #4. The Zacks Consensus Estimate for its fourth-quarter earnings, pegged at $1.05 cents per share, implies a decline of 11.8% from the prior-year quarter’s tally.

Edison boasts a long-term earnings growth rate of 3.7%. EIX has a four-quarter negative earnings surprise of 2.08%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Edison International (EIX) : Free Stock Analysis Report

Public Service Enterprise Group Incorporated (PEG) : Free Stock Analysis Report

American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report

The AES Corporation (AES) : Free Stock Analysis Report

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