American Electric Power Improves

Highlighted stocks include American Electric Power Co., Inc. (AEP - Analyst Report) and Duke Energy Corp. (DUK - Snapshot Report).

AEP Powers America, Reports Improved Results

American Electric Power (AEP - Analyst Report) reported improved 4th quarter 2008 core operating earnings of $237 million, or $0.59 per share, up 13% from $209 million, or $0.52 per share, for the 4th quarter of 2007. For the full fiscal year 2008, the company reported improved core operating earnings of $1.30 billion, or $3.24 per share, up 8% over $1.20 billion, or $3.00 per share, in fiscal 2007. Revenue of $14.6 billion in fiscal 2008 also compared favorably year-over-year, with a 9% over $13.4 billion in fiscal 2007.

Stable earnings growth in 2008 was primarily driven by new rates in 5 jurisdictions and investments to upgrade the utility’s electricity distribution network. The company also received another balanced rate order from Oklahoma regulators in early 2009.

AEP also reaffirmed its fiscal 2009 core earnings guidance range of $3.00 and $3.40 per share.

Going forward, AEP offers investors stable underlying core utility earnings, although with only modest growth potential. Consistent performance at the East Regulated segment, new 765-kV transmission lines at PJM, approval for the new Turk plant, its joint venture with Duke Energy (DUK - Snapshot Report), and favorable approval of rate changes from the PUCO and PUCT, represent a mildly bullish outlook for the stock. However, pruned expansion plans on account of tightening credit markets, a rising debt level, escalating coal costs, and uncertainty surrounding pending regulatory cases collectively continue to weigh on the stock.

Columbus, Ohio-based American Electric Power Company, Inc. is a public utility holding company which, through directly and indirectly-owned subsidiaries, generates, transmits and distributes electricity, natural gas and other commodities in North America and Europe. The company is one of the largest integrated utilities in the U.S., serving more than 5 million customers in 11 states with more than 38,000 MW [megawatts] of primarily coal-fired generating capacity and nearly 39,000-mile electricity transmission system network.