American Electric Power’s third-quarter figures beat expectations with earnings of $734 million ($1.49/share), up from $578 million ($1.17/share) over the same period in 2018. Operating income was $722 million ($1.46/share), against Zacks’ consensus estimate of $1.33/share.
The company said the difference between GAAP and operating earnings was driven primarily by the mark-to-market impact of economic hedging activities.
CEO Nick Akins told financial analysts Thursday that the company’s overall load is “making a comeback.” Industrial sales, driven by oil and gas production in Oklahoma, were up 3.4% during the quarter, and the footprint’s GDP grew at a 2.4% rate, ahead of the 2.1% national average, AEP said.
“I think you’re seeing some resiliency from an industrial and manufacturing standpoint. You’re starting to see it pick up,” Akins said. “We’ve got the oil and gas activity going gangbusters. … There’s no question people have more money in their pockets and people have more jobs. That’s reflected in what we see.”
The Ohio-based company increased and narrowed its 2019 operating earnings guidance range to $4.14 to $4.24/share, up from $4 to $4.20/share and reaffirmed its long-term growth rate of 5 to 7%. AEP’s share price is up 26.4% since the year began, beating the S&P 500’s 19.9% pace.
Wall Street greeted the news by driving the share price up 75 cents to $95.74 in after-hours trading.
— Tom Kleckner
