DOW JONES NEWSWIRES
American Electric Power Co.'s (AEP) second-quarter income rose
12% as increased rates more than overcame continued waning
electricity demand and weakness in wholesale sales. As such,
earnings beat expectations.
Electricity generator and provider American Electric, which has
more than five million customers in 11 states, has the U.S.'
largest transmission network. That makes the company, centered in
the Midwest, a front-line victim of the falling electricity use
that began late last year as the country's economic woes deepened.
For its part, the company has cut planned spending and raised money
through stock sales.
Chairman and Chief Executive Michael Morris said Friday the
company was pleased with its results in light of the continuing
weak economy. However, he added, "Electricity sold to individual
customers decreased from the same period last year. Off-system
sales - electricity sold into the wholesale market - were down
significantly from last year."
The company posted income of $316 million, or 67 cents a share,
up from $281 million, or 70 cents a share, a year earlier. There
were 17% more shares outstanding in the most recent period.
Excluding items, ongoing earnings were 68 cents.
Revenue decreased 8.5% to $3.2 billion as domestic retail
electricity demand fell 9% and wholesale sales slumped 35%.
Analysts surveyed by Thomson Reuters expected earnings of 61
cents a share and revenue of $3.63 billion.
Utility earnings rose 24% on increased rates in Virginia,
Indiana and Oklahoma and lower costs. Those factors more than
offset lower sales to industrial customers and off-system
sales.
American Electric, which affirmed its twice-cut full-year
outlook, saw shares close Thursday at $30.65. The shares were
inactive in premarket trading Friday.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com