American Electric Power Q4 Results Top Estimates, Backs 2014 Outlook

(RTTNews) - Electric utility company American Electric Power Co., Inc. (AEP) reported Monday a surge in profit for the fourth quarter, compared to last year that was weighed down by hefty impairments. Both operating earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its operating earnings forecast for the full-year 2014.

The Columbus, Ohio-based American Electric reported net earnings of $346 million or $0.71 per share for the fourth quarter, sharply higher than $21 million or $0.05 per share in the prior-year quarter. The results for the latest quarter primarily include Turk plant impairment of $0.17 per share, while the year-ago quarter primarily included $0.38 per share of Ohio plant impairments.

Excluding special items, operating earnings for the quarter were $296 million or $0.60 per share, compared to $242 million or $0.50 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to $3.8 billion from $3.6 billion in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $3.55 billion.

Operating earnings for utility operations was $244 million, compared to $283 million, and operating earnings for transmission operations was $27 million, compared to $13 million in the year-ago quarter.

AEP river operations posted operating earnings of $24 million, compared to $4 million, and generation and marketing reported operating earnings of $1 million, compared to $3 million in the prior-year quarter.

Total electric sales for the quarter edged down 0.6 percent to 51.48 billion kilo watt hours or kWh from the year-ago quarter.

Retail electric sales grew 1.5 percent to 40.89 billion kWh, from last year, while wholesale electric sales declined 7.8 percent to 10.58 billion kWh from a year ago.

The company also noted that it completed the corporate separation of Ohio assets on schedule and received all necessary approvals to transfer its Ohio generating assets December 31, 2013, to regulated affiliates and its new competitive generation affiliate.

"Our solid financial performance in 2013, despite the loss of significant retail margins in Ohio, reflects our focus on our earnings growth strategy - investment in our core regulated operations, including our transmission business, and achieving cost savings through sustainable process improvements," Chairman, President and CEO Nicholas Akins said.

For fiscal 2013, American Electric reported net earnings of $1.48 billion or $3.04 per share, higher than $1.26 billion or $2.60 per share in the prior year.

Excluding special items, operating earnings for the year was $1.57 billion or $3.23 per share, compared to $1.50 billion or $3.09 per share in the year ago. Analysts expected the company to report earnings of $3.19 per share for fiscal 2013.

Revenues for the full year increased to $15.4 billion from $14.9 billion reported in the previous year. Street was looking for full-year-2013 revenues of $15.60 billion.

Looking ahead to fiscal 2014, AEP reaffirmed its operating earnings forecast in a range $3.20 to $3.40 per share, which was provided in early November. Analysts expect the company to earn $3.33 per share.

The company also reaffirmed commitment to its long-term earnings growth strategy of 4 to 6 percent driven by transmission growth, investment in utility infrastructure and cost discipline.

AEP closed Friday's regular trading session at $46.77, down $0.69 on a volume of 3.72 million shares. In the past 52-week period, the stock has been trading in a range of $41.83 to $51.60.