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American Electric (AEP) Misses Q2 Earnings, Revenues Decline

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American Electric Power Co., Inc. (AEP - Free Report) reported second-quarter 2017 operating earnings per share (EPS) of 75 cents, missing the Zacks Consensus Estimate of 82 cents by 8.5%.

Earnings also declined 21.1% from 95 cents reported a year ago.

Total Revenue

American Electric’s second-quarter revenues of $3.6 billion fell 7.7% from $3.9 billion in the year-ago quarter. The reported figure also missed the Zacks Consensus Estimate of $3.7 billion.

Quarterly Highlights

Operating expenses in the reported quarter were $1,638.3 million compared with $1,717.1 million a year ago.

Operating income in the quarter was $748 million, down 13.1% from $860.5 million a year ago.

Segmental Performance

Vertically Integrated Utility Operations: Operating earnings in the quarter declined to $120.8 million from $209.4 million a year ago.

Transmission & Distribution Utilities: Operating earnings were $111.2 million in the quarter, down from $124.6 million a year ago.

AEP Transmission Holdco: This segment generated an operating income of $94.6 million, up from $43.9 million recorded in the second quarter of 2016.

Generation and Marketing: Operating earnings were $46 million, down from $70.7 million in the year-ago quarter.

Financial Update

As of Jun 30, 2017, American Electric had $172.4 million in cash and cash equivalents compared with $210.5 million as of Dec 31, 2016.

Long-term debt was $19.55 billion as of Jun 30, 2017, compared with $20.26 billion as of Dec 31, 2016.

Cash flow from operations was $1,717 million in the first half of 2017 compared with $1,725.8 million in the prior-year period.

Guidance

American Electric reaffirmed its 2017 operating earnings guidance in the range of $3.55–$3.75.

Peer Releases

DTE Energy Company (DTE - Free Report) reported second-quarter 2017 operating earnings per share (EPS) of $1.07, which surpassed the Zacks Consensus Estimate of 97 cents by 10.3%. Operating earnings also grew 9.2% from the year-ago figure of 98 cents.

NextEra Energy, Inc. (NEE - Free Report) reported second-quarter 2017 adjusted earnings of $1.86 per share, beating the Zacks Consensus Estimate of $1.76 by 5.7%. Reported earnings were also up by 11.4% year over year.

WEC Energy Group (WEC - Free Report) reported second-quarter 2017 adjusted earnings of 63 cents per share, surpassing the Zacks Consensus Estimate of 59 cents by 6.8% and the year-ago figure of 57 cents by 10.5%.

Zacks Rank

American Electric currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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