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AEP (AEP) Down 1.9% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for American Electric Power (AEP - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AEP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Electric Q4 Earnings Miss, Revenues Fall Y/Y
American Electric Power reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.23, which missed the Zacks Consensus Estimate of $1.27 by 3.1%. The bottom line, however, improved 17.1% from $1.05 recorded in the year-ago quarter.
The company reported GAAP earnings of 64 cents per share compared with the year-ago quarter’s figure of 75 cents.
For 2023, the company generated adjusted EPS of $5.25, up from $5.09 recorded in 2022. The full-year bottom line, however, missed the consensus estimate of $5.27 by 0.4%.
Total Revenues
American Electric’s fourth-quarter operating revenues of $4,600 million lagged the Zacks Consensus Estimate of $5,217 million by 11.8%. The reported figure also decreased 5.8% from the year-ago quarter’s level of $4,881 million.
For 2023, the company generated revenues of $18.98 billion compared with $19.64 billion in 2022. The full-year top line also missed the consensus estimate of $19.69 billion.
Segmental Performance
Vertically Integrated Utility Operations: Adjusted earnings for the quarter increased to $237.8 million from $208.7 million in the year-ago period.
Transmission & Distribution Utilities: Adjusted earnings totaled $188.6 million, up from $112.6 million in the year-ago quarter.
AEP Transmission Holdco: This segment generated adjusted earnings of $159.3 million, down from $188.1 million in the year-ago quarter.
Generation and Marketing: Adjusted earnings amounted to $103.5 million, up from $81.1 million in the year-ago quarter.
All Other: The segment reported a loss of $42.3 million compared with a loss of $50.4 million in the year-ago period.
Highlights of the Result
In the reported quarter, electricity sales volume from Vertically Integrated Utilities dropped 4.7% year over year, while Transmission & Distribution Utilities sales volume improved 9.9%.
Total expenses in 2023 were $15.43 billion, down 4.5% from the year-ago level.
Interest expenses amounted to $1.81 billion, up 29.4% from $1.40 billion in the year-ago quarter.
Guidance
American Electric reiterated its 2024 operating earnings guidance. It still expects to generate earnings in the band of $5.53-$5.73 per share. The Zacks Consensus Estimate for 2024 earnings is pegged at $5.55 per share, lower than the midpoint of the company’s projected range.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, AEP has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AEP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
AEP is part of the Zacks Utility - Electric Power industry. Over the past month, Edison International (EIX - Free Report) , a stock from the same industry, has gained 0.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Edison International reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of -7.7%. EPS of $1.28 for the same period compares with $1.14 a year ago.
Edison International is expected to post earnings of $1.24 per share for the current quarter, representing a year-over-year change of +13.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.
Edison International has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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AEP (AEP) Down 1.9% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for American Electric Power (AEP - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AEP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Electric Q4 Earnings Miss, Revenues Fall Y/Y
American Electric Power reported fourth-quarter 2023 adjusted earnings per share (EPS) of $1.23, which missed the Zacks Consensus Estimate of $1.27 by 3.1%. The bottom line, however, improved 17.1% from $1.05 recorded in the year-ago quarter.
The company reported GAAP earnings of 64 cents per share compared with the year-ago quarter’s figure of 75 cents.
For 2023, the company generated adjusted EPS of $5.25, up from $5.09 recorded in 2022. The full-year bottom line, however, missed the consensus estimate of $5.27 by 0.4%.
Total Revenues
American Electric’s fourth-quarter operating revenues of $4,600 million lagged the Zacks Consensus Estimate of $5,217 million by 11.8%. The reported figure also decreased 5.8% from the year-ago quarter’s level of $4,881 million.
For 2023, the company generated revenues of $18.98 billion compared with $19.64 billion in 2022. The full-year top line also missed the consensus estimate of $19.69 billion.
Segmental Performance
Vertically Integrated Utility Operations: Adjusted earnings for the quarter increased to $237.8 million from $208.7 million in the year-ago period.
Transmission & Distribution Utilities: Adjusted earnings totaled $188.6 million, up from $112.6 million in the year-ago quarter.
AEP Transmission Holdco: This segment generated adjusted earnings of $159.3 million, down from $188.1 million in the year-ago quarter.
Generation and Marketing: Adjusted earnings amounted to $103.5 million, up from $81.1 million in the year-ago quarter.
All Other: The segment reported a loss of $42.3 million compared with a loss of $50.4 million in the year-ago period.
Highlights of the Result
In the reported quarter, electricity sales volume from Vertically Integrated Utilities dropped 4.7% year over year, while Transmission & Distribution Utilities sales volume improved 9.9%.
Total expenses in 2023 were $15.43 billion, down 4.5% from the year-ago level.
Interest expenses amounted to $1.81 billion, up 29.4% from $1.40 billion in the year-ago quarter.
Guidance
American Electric reiterated its 2024 operating earnings guidance. It still expects to generate earnings in the band of $5.53-$5.73 per share. The Zacks Consensus Estimate for 2024 earnings is pegged at $5.55 per share, lower than the midpoint of the company’s projected range.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, AEP has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AEP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
AEP is part of the Zacks Utility - Electric Power industry. Over the past month, Edison International (EIX - Free Report) , a stock from the same industry, has gained 0.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Edison International reported revenues of $3.71 billion in the last reported quarter, representing a year-over-year change of -7.7%. EPS of $1.28 for the same period compares with $1.14 a year ago.
Edison International is expected to post earnings of $1.24 per share for the current quarter, representing a year-over-year change of +13.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.
Edison International has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.