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American Electric (AEP) Q4 Earnings In Line, Revenues Fall Y/Y

Zacks Equity Research

American Electric Power Co., Inc. AEP reported fourth-quarter 2019 adjusted earnings per share of 60 cents, which came in line with the Zacks Consensus Estimate. However, the bottom line declined 16.7% from 72 cents in the year-ago quarter.

The company reported GAAP earnings of 31 cents per share compared with the year-ago quarter’s 74 cents.

The year-over-year downside can be attributed to lower revenues.

For 2019, the company reported adjusted earnings of $4.24 per share, which surpassed the Zacks Consensus Estimate of $4.22 by 0.5%. The full-year earnings increased 7.3% from the prior year and came in line with the higher end of the guided range of $4.14-$4.24 per share.

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

Total Revenues

American Electric’s fourth-quarter revenues of $3.6 billion missed the Zacks Consensus Estimate of $4.1 billion by 12.2%. The reported figure declined 5.3% from the year-ago quarter’s $3.8 billion.

For 2019, the company reported revenues of $15.6 billion, which missed the Zacks Consensus Estimate of $16 billion by 2.5%. The reported figure also declined 3.7% from the year-ago figure of $16.2 billion.

Quarterly Highlights

Operating expenses in the quarter were $2,038.7 million compared with $1,912.8 million a year ago.

Operating income was $471.4 million, down 16.3% from $563.1 million in the year-ago quarter.

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter increased to $136.5 million from $130.5 million a year ago.

Transmission & Distribution Utilities: Operating earnings were $71 million, down from $132.1 million a year ago.

AEP Transmission Holdco: This segment generated operating income of $111.5 million, down from $791.5 million in the fourth quarter of 2018.

Generation and Marketing: Operating earnings were $0.1 million, down from $35.2 million in the year-ago quarter.

Corporate & Other: Operating losses were $25 million compared with operating loss of $34.9 million in the year-ago quarter.

Financial Update

As of Dec 31, 2019, American Electric had cash and cash equivalents of $246.8 million compared with $234.1 million as of Dec 31, 2018.

Long-term debt was $25.13 billion as of Dec 31, 2019, compared with $21.65 billion as of Dec 31, 2018.

Cash flow from operations was $4.27 billion during 2019 compared with $5.22 million in 2018.

2019 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 $4.39, lies above the mid-point of the company’s 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.

Recent Utility Releases

Duke Energy Corporation DUK reported fourth-quarter 2019 adjusted earnings of 91 cents per share, which surpassed the Zacks Consensus Estimate of 88 cents by 3.4%.

NextEra Energy NEE reported fourth-quarter 2019 adjusted earnings of $1.44 per share, which lagged the Zacks Consensus Estimate of $1.54 by 6.5%.

Dominion Energy D reported fourth-quarter 2019 operating earnings of $1.18 per share, which beat the Zacks Consensus Estimate of $1.16 by 1.7%.

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