• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

American Electric Power's Third-Quarter Earnings Drop 27 Percent

Posted on: Saturday, 29 October 2005, 00:00 CDT

By SARAH ANDERSON

COLUMBUS, Ohio - American Electric Power Inc. said its third- quarter earnings dropped 27 percent from a year ago, when the company's profit was inflated by a one-time gain from the sale of property and assets. Still, the results surpassed analysts' expectations.

Earnings for the quarter ended Sept. 30 were $387 million, or 99 cents per share, compared with $530 million, or $1.34 per share in 2004. Without non-recurring items, AEP reported earnings of $370 million, or 95 cents per share, compared with $318 million, or 80 cents per share, a year ago.

The Columbus, Ohio-based company said its results, which surpassed the 82-cent estimate of analysts surveyed by Thomson Financial, were driven primarily by increased electricity sales to retail customers who kept their air conditioners on during the quarter that started July 1.

"Favorable weather played an important part in the earnings improvement, but our decision to focus our strategy on our strong utility operations played an equally important role," said Chairman and Chief Executive Michael Morris.

The company has improved its "laser focus" on domestic utility operations by shedding international drains on earnings, Morris said in a conference call with analysts.

Revenue for the quarter was $3.3 billion, down from $3.8 billion last year.

AEP increased its outlook for the year, reporting that it expects earnings to be between $2.55 and $2.65 per share, up from previous expectation of $2.30 to $2.50 per share.

In the first nine months of this year, the company has earned $2.44 per share. Analysts estimate the company will earn 32 cents per share in the fourth quarter.

AEP said it expects earnings of $2.50 to $2.70 a share for 2006.

For the first three quarters, the nation's largest power generator has recorded $9.1 billion in revenue and $948 million in earnings, compared with $10.6 billion and $757 million respectively a year ago.

Executives said at the end of the second quarter that it was conservative on its annual outlook because mild weather could have led customers to turn off their air conditions.

Last year's one-time gains included the sale of four independent power producers in Florida and Colorado, two coal-fired plants in the United Kingdom, its 50 percent interest in another U.K. company and a natural gas facility in Louisiana.

The company's stock fell 5 cents to $36.61 on the New York Stock Exchange on Thursday. It has traded between $32.25 and $40.80 in the last year.

Source: Charleston Daily Mail

More News in this Category