American Electric Tops Estimates, Backs 2014 Outlook

(RTTNews) - Electric utility American Electric Power Co., Inc. (AEP) reported Friday a profit for the second quarter that grew from last year, reflecting increase in revenues amid rate base growth. Both operating earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed its operating earnings forecast for the full-year 2014.

"We continue to see the positive effects of executing our regulated earnings growth strategy. Our solid financial performance in the second quarter was supported by the rate base growth we've achieved through investments in infrastructure and system improvements for the benefit of our customers," Chairman, President and CEO Nicholas Akins said in a statement.

Columbus, Ohio-based American Electric reported net earnings of $390 million or $0.80 per share for the second quarter, higher than $338 million or $0.69 per share in the prior-year quarter, which included $0.04 per share of net charges.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.75 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew to $4.04 billion from $3.58 billion in the same quarter last year, and topped seven Wall Street analysts' consensus estimate of $3.97 billion.

The company said its focus on transmission is boosting earnings. AEP Transmission Holding Co., including equity earnings from joint ventures, contributed $0.10 per share to earnings in second-quarter 2014, up $0.06 from the earnings contribution in the year-ago quarter. During the past twelve months, the company has grown Transmission Holding Co.'s net plant assets by 92 percent to nearly $2.1 billion.

The company said it continues successful execution of regulated earnings growth strategy, adding another $100 million in capital investment to its transmission business in 2014. The company has already invested $300 million in 2014, bringing total transmission capital investment to about $1.9 billion, which will support its future earnings growth.

The company also added that it has maintained focus on cost controls and process improvements. Despite, boosting spending into 2014 from future years, the company remains well-positioned within its 2014 earnings guidance range.

Looking ahead to fiscal 2014, American Electric reaffirmed its operating earnings forecast in the range of $3.35 to $3.55 per share. Street is currently looking for full-year 2014 earnings of $3.48 per share.

AEP closed Thursday's regular trading session at $54.01, up $0.05 on a volume of 2.19 million shares. In the past 52-week period, the stock has been trading in a range of $41.83 to $55.94.