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American Electric Power (AEP) Up 4.1% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for American Electric Power Company, Inc. (AEP - Free Report) . Shares have added about 4.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
American Electric Misses Q1 Earnings, Keeps EPS View
American Electric Power reported first-quarter 2017 operating earnings of $0.96 per share, missing the Zacks Consensus Estimate of $0.97 by 1%.
Earnings also dropped 5.9% year over year owing to warmer-than-normal winter weather conditions.
Total Revenue
American Electric’s first-quarter revenues of $3,936.2 million fell 2.7% from $4,044.9 million in the year-ago quarter. The reported figure however exceeded the Zacks Consensus Estimate of $3,874.4 million.
Quarterly Highlights
Operating expenses incurred in the reported quarter were $1,646.3 million, compared with $1,745 million a year ago.
Operating income in first-quarter 2017 was $884.7 million, down 1% from $892.9 million a year ago.
Segmental Performance
Vertically Integrated Utility Operations: Operating earnings in the quarter declined to $219.5 million from $277.6 million a year ago.
Transmission & Distribution Utilities: Operating earnings were $119.1 million in the quarter, up from $107.5 million a year ago.
AEP Transmission Holdco: This segment generated an operating income of $71.8 million, up from $43.9 million recorded in the first quarter of 2016.
Generation and Marketing: Operating earnings were $68.3 million, down from $70.7 million in the first quarter of 2016.
Financial Update
As of Mar 31, 2017, American Electric had $175 million in cash and cash equivalents, compared with $210.5 million as of Dec 31, 2016.
Long-term debt was $19.24 billion as of Mar 31, 2017, compared with $20.26 billion as of Dec 31, 2016.
Cash flow from operations was $806.8 million in the first quarter of 2017, compared with $799.9 million in the prior year quarter.
Guidance
American Electric reaffirmed its 2017 operating earnings guidance at the range of $3.55–$3.75.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been no revision higher for the current quarter compared to one lower.
American Electric Power Company, Inc. Price and Consensus
At this time, the stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Charting a somewhat similar path, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for momentum, value and growth investors.
Outlook
Estimates have been trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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American Electric Power (AEP) Up 4.1% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for American Electric Power Company, Inc. (AEP - Free Report) . Shares have added about 4.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 drivers.
American Electric Misses Q1 Earnings, Keeps EPS View
American Electric Power reported first-quarter 2017 operating earnings of $0.96 per share, missing the Zacks Consensus Estimate of $0.97 by 1%.
Earnings also dropped 5.9% year over year owing to warmer-than-normal winter weather conditions.
Total Revenue
American Electric’s first-quarter revenues of $3,936.2 million fell 2.7% from $4,044.9 million in the year-ago quarter. The reported figure however exceeded the Zacks Consensus Estimate of $3,874.4 million.
Quarterly Highlights
Operating expenses incurred in the reported quarter were $1,646.3 million, compared with $1,745 million a year ago.
Operating income in first-quarter 2017 was $884.7 million, down 1% from $892.9 million a year ago.
Segmental Performance
Vertically Integrated Utility Operations: Operating earnings in the quarter declined to $219.5 million from $277.6 million a year ago.
Transmission & Distribution Utilities: Operating earnings were $119.1 million in the quarter, up from $107.5 million a year ago.
AEP Transmission Holdco: This segment generated an operating income of $71.8 million, up from $43.9 million recorded in the first quarter of 2016.
Generation and Marketing: Operating earnings were $68.3 million, down from $70.7 million in the first quarter of 2016.
Financial Update
As of Mar 31, 2017, American Electric had $175 million in cash and cash equivalents, compared with $210.5 million as of Dec 31, 2016.
Long-term debt was $19.24 billion as of Mar 31, 2017, compared with $20.26 billion as of Dec 31, 2016.
Cash flow from operations was $806.8 million in the first quarter of 2017, compared with $799.9 million in the prior year quarter.
Guidance
American Electric reaffirmed its 2017 operating earnings guidance at the range of $3.55–$3.75.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been no revision higher for the current quarter compared to one lower.
American Electric Power Company, Inc. Price and Consensus
American Electric Power Company, Inc. Price and Consensus | American Electric Power Company, Inc. Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Charting a somewhat similar path, 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 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for momentum, value and growth investors.
Outlook
Estimates have been trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.