DOW JONES NEWSWIRES
American Electric Power Co. (AEP) reported a 37% drop in
first-quarter net profit from a prior-year gain enhanced by a legal
settlement and as electricity demand continues to wane.
American Electric, one of the nation's biggest electricity
generators and providers with more than 5 million customers in 11
states, has the U.S.'s largest transmission network. That makes the
company, centered in the Midwest, a front-line victim of falling
electricity use that began late last year as the country's economic
woes deepened.
As such, the company said in October it would cut planned
capital spending this year by more than 20% to $2.6 billion and
last month said planned 2010 expenditures would be nearly half
prior estimates.
American Electric raised some $1.5 billion earlier this month
through a stock sale that boosted shares outstanding nearly 15%.
Thursday, it reported net income of $360 million, or 89 cents a
share, compared with $573 million, or $1.43 a share, a year
earlier. The prior-year legal gain was 41 cents.
Revenue was flat at $3.5 billion as domestic retail electricity
demand fell 6.5%. Wholesale sales tumbled 42%.
The mean estimates of analysts surveyed by Thomson Reuters was
earnings of 81 cents and revenue of $3.77 billion.
Utility earnings fell 16% on lower sales to industrial customers
and higher costs. The biggest weakness was excess power sales,
where profit slumped 62%.
Shares of American Electric, which reiterated its twice-reduced
2009 earnings forecast as upcoming rate increases will boost
results, closed Thursday at $26.14 and were inactive premarket. The
stock has been on a downward slope since late 2007 and is down 40%
the past year.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com