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American Electric (AEP) Q2 Earnings Beat, Revenues Fall Y/Y

Zacks Equity Research
·3 min read

American Electric Power Co., Inc. AEP reported second-quarter 2020 adjusted earnings per share of $1.08, which beat the Zacks Consensus Estimate of $1.05 by 2.9%. The bottom line also improved 8% from $1 in the year-ago quarter.

The company reported GAAP earnings of $1.05 per share compared with the year-ago quarter’s earnings of 93 cents.

The year-over-year upside can be attributed to favorable weather conditions along with solid costs savings and efficiency programs.

Total Revenues

American Electric’s second-quarter revenues of $3.5 billion missed the Zacks Consensus Estimate of $3.8 billion by 7.9%. The reported figure also declined 2.8% from the year-ago quarter’s $3.6 billion.

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. Price, Consensus and EPS Surprise

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

Quarterly Highlights

Total adjusted expenses in the quarter were $1,778 million compared with $1,862 million a year ago.

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Adjusted operating income was $738.7 million, up 26.1% from $585.6 million in the year-ago quarter.

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter increased to $270.4 million from $186.9 million in the year-ago quarter.

Transmission & Distribution Utilities: Operating earnings were $144.9 million, up from $131.3 million in the year-ago quarter.

AEP Transmission Holdco: This segment generated operating earnings of $93.9 million, down from $154.6 million in the second quarter of 2019.

Generation and Marketing: Operating earnings were $55.9 million, up from $27.4 million in the year-ago quarter.

Corporate & Other: Operating losses were $31.6 million compared with operating loss of $6.6 million in the year-ago quarter.

Financial Update

As of Jun 30, 2020, American Electric had cash and cash equivalents of $348.8 million compared with $246.8 million as of Dec 31, 2019.

Long-term debt was $26.64 billion as of Jun 30, 2020, compared with $25.13 billion as of Dec 31, 2019.

Cash flow from operations was $1,746.2 million at the end of second-quarter 2020 compared with $1,800.8 million at the end of second-quarter 2019.

2020 Guidance

American Electric reaffirmed 2020 operating earnings guidance in the range of $4.25-$4.45 per share. The Zacks Consensus Estimate for 2020 earnings, pegged at $4.29, lies below the mid-point of the guidance.

Zacks Rank

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

Other Utility Releases

FirstEnergy Corporation FE delivered second-quarter 2020 operating earnings of 57 cents per share, which beat the Zacks Consensus Estimate of 55 cents by 3.64%.

NextEra Energy, Inc. NEE reported second-quarter 2020 adjusted earnings of $2.61 per share, beating the Zacks Consensus Estimate of $2.50 by 4.4%.

CMS Energy Corporation CMS reported second-quarter 2020 adjusted earnings per share of 49 cents, which surpassed the Zacks Consensus Estimate of 45 cents by 8.9%.

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