During American Electric Power’s second-quarter earnings call with financial analysts last week, CEO Nick Akins was pressed about the uncertainty the company’s proposed Wind Catcher Energy Connection was placing on its share price. In the company’s earnings release, Akins had promised the company’s investments in its regulated businesses “will continue to support our 5 to 7% earnings growth rate.”
During the July 25 call, Akins was asked at what point do you decide that you are better off walking away from the table and the uncertainty?
“A very fair question,” he responded. “We cannot afford to continue to allow this thing to languish given construction has started and the company is incurring expenses associated with it.”
Two days later, AEP removed the uncertainty, canceling Wind Catcher, a $4.5 billion, 2-GW wind farm in the Oklahoma Panhandle. The move came one day after the Texas Public Utility Commission rejected the proposal. (See related story, AEP Cancels Wind Catcher Following Texas Rejection.)
Wall Street appeared to like the company’s reaction. After closing the day of the earnings call at $69.38, AEP stock ended the week at $71.14/share, up $1.76. That’s still well below the company’s 12-month high of $77.63, which it hit in November.
Ohio-based AEP reported a “very healthy quarter” thanks to a late winter and early summer, with second-quarter earnings of $528 million ($1.07/share). That was up from the prior year second quarter of $375 million ($0.76/share).
NextEra Energy Earnings Up
NextEra Energy announced a small increase in second-quarter earnings last week, reporting net income of $795 million ($1.64/share). That was a $2 million improvement from the prior year’s quarter of $793 million ($1.68/share).
The Florida company’s adjusted earnings of $1 billion ($2.11/share), compared to $881 million ($1.86/share) in last year’s second quarter. That beat Zacks Investment Research’s consensus estimate of $2.07/share.
NextEra announced in May it will pay Southern Co. almost $6.5 billion for Gulf Power, Florida City Gas and shares in the Oleander and Stanton natural gas power plants. CEO Jim Robo said the company “remains on track to meet its objectives for the year.”
Despite the good news, NextEra’s stock lost $2.03/share following the July 25 earnings announcement, finishing the week at $166.99.
Xcel Energy Beats Analysts’ Expectations
Xcel Energy reported a 16% increase in second-quarter earnings boosted by favorable weather and sales growth, exceeding analysts’ expectations.
The Minneapolis company on Thursday announced earnings of $265 million ($0.52/share), up from $227 million ($0.45/share) a year ago. Zacks’ analyst survey had forecasted profits of 47 cents/share.
The results exclude the effects from 2017’s federal tax legislation.
The company’s stock finished the week at $46.59/share, up 68 cents.
— Tom Kleckner
