Thursday, February 21, 2019

AEP Reports Positive Earnings for Q4, 2018

By Tom Kleckner

AEP’s Columbus, Ohio, headquarters

American Electric Power on Thursday reported strong fourth-quarter and year-end earnings in line with analysts’ expectations.

While results were dampened by the global trade wars and a stronger dollar, company executives said they expect the positive economic activity to continue in 2019.

AEP earned $363 million ($0.74/share) last quarter, compared to $401 million ($0.81/share) for the same period in 2017. Analysts had expected earnings of 72 cents/share, according to the Zacks Consensus Estimate.

Year-end earnings were $1.92 billion ($3.90/share), up from $1.91 billion ($3.89/share) the year before.

“Our strong earnings performance in 2018 was driven by a robust economy,” CEO Nick Akins said during a call with analysts. “2018 has clearly been a great year, but we’re even more pleased with our track record over the last eight.”

Akins said that over the past five years, the Columbus, Ohio-based company has provided a total shareholder return of more than 92%, greater than both the S&P 500 Index (50%) and the S&P 500 Electric Utilities Index (65%).

CFO Brian Tierney noted AEP’s performance would have been even better had it not been for its service territory’s higher exposure to tariffs. He said 38% of all U.S. exports originate in AEP’s 11 regulated states.

“The early-year performance carried us through the headwinds,” Tierney said, referring to the company’s benefits from tax reform.

AEP’s service territory | AEP

The company expects positive economic activity to continue in 2019, fueled by oil and gas development in its western footprint.

AEP’s stock price opened at $77.10 on Thursday and closed at $77.74. It has gained 11.5% over the past year.

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