2024

Generation

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<p class="has-drop-cap">American Electric Power (NASDAQ: AEP) <a href="https://www.aep.com/newsroom/resources/earnings/2024-11/3rdqtr24earnings.pdf" target="_blank" aria-label="reported (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">reported</a> its third-quarter 2024 earnings, showcasing a robust performance against the backdrop of continued investments in service improvements and energy system enhancements. The company posted GAAP earnings of $960 million, translating to $1.80 per share, which was slightly below the $1.83 per share reported in the same quarter of 2023.</p>
<p>Despite this minor dip in GAAP earnings per share, AEP’s operating earnings, which exclude special items, rose to $985 million or <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">$1.85 per share</a>, compared to $924 million or $1.77 per share in the third quarter of the previous year. This increase in operating earnings underscores the company’s strategic focus on strengthening its energy infrastructure to meet growing customer demand.</p>
<p>The third-quarter revenue stood at $5.4 billion, a slight increase from $5.3 billion in the same period last year. This growth is attributed to the company’s efforts to enhance its vertically integrated utilities and transmission and distribution utilities, which showed significant improvements in earnings. The Vertically Integrated Utilities segment saw an increase of $59 million in GAAP earnings, while the Transmission &amp; Distribution Utilities segment increased by $39.2 million. However, the Generation &amp; Marketing segment experienced a decline, reflecting the reduced scope of activities in this segment moving forward.</p>
<p>AEP’s leadership highlighted the importance of continued investment in a reliable and resilient grid, as well as new generation opportunities to serve the increasing load growth. The company’s commitment to operational excellence and financial discipline has been pivotal in delivering these results, positioning AEP for sustained growth in the future. The focus on customer service and stakeholder value remains central to AEP’s strategy, as evidenced by its expanded capital investment plan and long-term growth rate projections.</p>
<h3 id="aep-reports-eps-and-revenue-in-line-for-third-quarter">AEP Reports EPS and Revenue in Line for Third Quarter</h3>
<p>When comparing AEP’s actual performance to market expectations for the third quarter, the company delivered mixed results. Analysts had anticipated an earnings per share (EPS) of $1.8 and revenue of $5.43 billion. AEP met the EPS expectation precisely with a GAAP EPS of $1.80, while its operating EPS of $1.85 slightly exceeded expectations. However, revenue came in just shy of the anticipated $5.43 billion, with the company reporting $5.4 billion for the quarter.</p>
<p>This slight shortfall in revenue compared to expectations can be attributed to various factors, including the performance of the Generation &amp; Marketing segment, which saw a reduction in its contribution due to a strategic narrowing of its activities. Despite this, the company’s overall performance was bolstered by strong results in its core utility segments, which continue to drive growth and stability. The Transmission &amp; Distribution Utilities segment, in particular, showed a notable increase in both GAAP and operating earnings, reflecting the company’s strategic focus on these areas.</p>
<p>AEP’s ability to meet EPS expectations demonstrates its effective cost management and operational efficiency, even in the face of revenue challenges. The company’s leadership remains confident in its strategic direction, emphasizing the importance of ongoing investments in infrastructure and customer service as key drivers of future growth. This confidence is further supported by the company’s revised guidance and long-term growth projections.</p>
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<h3 id="aep-narrows-2024-operating-expenses-guidance-to-5-58-to-5-68-range">AEP Narrows 2024 Operating Expenses Guidance to $5.58 to $5.68 Range</h3>
<p>Looking ahead, AEP has narrowed its 2024 operating earnings guidance to a range of $5.58 to $5.68 per share, maintaining a midpoint of $5.63. This adjustment reflects the company’s confidence in its ability to achieve its financial targets, driven by continued investments in its regulated businesses and strategic initiatives aimed at enhancing service reliability and meeting growing demand. The company’s long-term growth rate projection of 6% to 8% is based on its 2025 operating earnings guidance of $5.75 to $5.95 per share.</p>
<p>AEP’s expanded five-year capital plan, which now totals $54 billion, underscores its commitment to supporting reliability and demand growth across its service areas. This investment will be crucial in developing a resilient grid and exploring new generation opportunities, particularly in response to the unprecedented load growth observed in the commercial sector. The company anticipates commercial load to grow at an average rate of 20% annually over the next three years, driven by customer contracts for significant load additions in key states like Ohio, Texas, and Indiana.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/american-electric-power-reports-third-quarter-results-with-1-85-eps/">American Electric Power Reports Third Quarter Results with $1.85 EPS</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

American Electric Power Reports Third Quarter Results with $1.85 EPS

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