01.11.2016 12:43:03

AEP Lifts FY16 EPS View, Sees Weakness In FY17; Ups Capital Investment

(RTTNews) - American Electric Power (AEP) Tuesday said it is increasing and narrowing operating earnings guidance for 2016 to $3.75 to $3.85 per share. The company's previous earnings forecast was in a range of $3.60 to $3.80 per share.

On average, 21 analysts polled by Thomson Reuters expect earnings of $3.71 per share for the year. Analysts' estimates typically exclude special items.

The company said the revision in outlook is based on solid operating earnings results for the third quarter and the year and the firm's success in managing costs.

Reflecting special items recorded through the third quarter, the estimated earnings per share on a reported basis would be $0.96 to $1.06 per share.

Further, the company announced operating earnings guidance for 2017 of $3.55 to $3.75 per share, reflecting dilution from the competitive generation asset sale. Analysts expect earnings of $3.76 per share for fiscal 2017.

AEP's operating earnings guidance range is forecast at $3.75 to $3.95 per share for 2018 and $4.00 to $4.20 per share for 2019.

Further, AEP said it is increasing capital investment in its core operations over the next three years to support a higher operating earnings growth range of 5 to 7 percent from the previous 4 to 6 percent growth rate.

To support earnings growth, AEP plans to invest approximately $17.3 billion over the period 2017 to 2019 in its core regulated operations and contracted renewables.

AEP's increased capital investment plan includes reinvestment of $2.2 billion in levered proceeds after the expected completion of the sale of part of its competitive generation portfolio.

The company also took a pre-tax impairment charge of $2.3 billion in third-quarter 2016 largely to write-down AEP's remaining competitive generation assets in Ohio to their estimated fair value.

AEP plans to invest approximately $9 billion in its transmission business over the next three years.

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