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American Electric (AEP) Q1 Earnings Hit by Warm Weather

American Electric Power Co., Inc. AEP reported first-quarter 2016 operating earnings of $1.02 per share, missing the Zacks Consensus Estimate of $1.06 by 3.8%.

Earnings also dropped 20.3% from the year-ago figure owing to an unseasonably winter that led to weak residential sales and low power prices.

Total Revenue

American Electric Power’s first-quarter revenues of $4,044.9 million decreased 14% from $4,701.3 million in the year-ago quarter.

Quarterly Highlights of the Release

Operating expenses incurred in the reported quarter were $1,745 million compared with $1,794.5 million a year ago.

Operating income in first-quarter 2016 was $892.9 million, down 20.1% from $1,117.2 million a year ago.

Quarterly Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter decreased 21.7% to $277.6 million from $299.3 million a year ago. The downside was driven by mild temperatures, lower margins from wholesale energy sales, higher operations and maintenance expenses, and an unfavorable change in a regulatory provision.

Transmission & Distribution Utilities: Operating earnings were $108 million in the quarter, up from $97.2 million a year ago, reflecting favorable rate changes.

AEP Transmission Holdco: This segment generated an operating income of $43.9 million, up from $35.8 million in the first quarter of 2015, backed by increased transmission investment.

Generation and Marketing: Operating earnings were $70.7 million, down from $183 million in the first quarter of 2015. The decrease was due to lower capacity revenue and energy margins.

Financial Update

As of Mar 31, 2016, American Electric Power had $190.4 million in cash and cash equivalents compared with $176.4 million as of Dec 31, 2015.

Long-term debt was $17.75 billion as of Mar 31, 2016, compared with $17.74 billion as of Dec 31, 2015.

Guidance

American Electric Power Company reiterated its 2016 operating earnings guidance of $3.60 to $3.80 per share.

Zacks Rank

American Electric Power currently carries a Zacks Rank #3 (Hold).

Peer Release

DTE Energy Company DTE reported first-quarter 2016 operating earnings per share of $1.52, in line with the Zacks Consensus Estimate. Reported earnings, however, dropped 7.9% from the year-ago figure of $1.65.

Upcoming Releases

Public Service Enterprise Group Inc. PEG is scheduled to report first-quarter 2016 results on Apr 29, 2016.

Duke Energy Corp. DUK is scheduled to report first-quarter 2016 results on May 3, 2016.

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AMER ELEC PWR (AEP): Free Stock Analysis Report
 
DUKE ENERGY CP (DUK): Free Stock Analysis Report
 
DTE ENERGY CO (DTE): Free Stock Analysis Report
 
PUBLIC SV ENTRP (PEG): Free Stock Analysis Report
 
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