Electric utility American Electric Power Co., Inc. (AEP) reported Friday a profit for the second quarter that grew from last year, reflecting lower expenses amid cost controls.
Both ongoing earnings per share and quarterly revenues topped analysts' expectations. The company also said its earnings guidance for 2012 remains suspended because of the ongoing Ohio regulatory proceedings.
The company noted that it is maintaining a disciplined approach to controlling costs in the first phase of its cost restructuring program launched earlier this year.
"We had solid financial performance in the second quarter, driven by warmer than normal weather and our continued disciplined approach to controlling costs. The economy in our service territories has shown some signs of improvement, with growth in our western states outpacing that in our eastern states," President and CEO Nicholas Akins said in a statement.
The Columbus, Ohio-based company reported net earnings of $362 million or $0.75 per share for the second quarter, up from $352 million or $0.73 per share in the prior-year quarter.
Excluding special items, operating earnings for the quarter grew to $370 million or $0.77 per share from $352 million or $0.73 per share in the year-ago quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.71 per share for the second quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter were flat with last year at $3.6 billion, and topped five Wall Street analysts' consensus estimate of $3.57 billion by a whisker.
"In operations, severe storms swept through our eastern states on June 29, causing considerable damage. At the peak we had more than 1.4 million customers in five states without power, an unprecedented outage number for AEP," Akins noted.
Total electric sales for the quarter decreased 2.9 percent to 51.06 billion kWh from the year-ago quarter.
Retail electric sales edged up 0.2 percent to 42.44 billion kilo watt hours or kWh, from last year, while wholesale electric sales declined 15.6 percent to 8.62 billion kWh from a year ago.
Operating earnings for utility operations was $364 million, up from $349 million in the year-ago quarter.
Adjusted operations and maintenance expense decreased $97 million from last year, primarily reflecting the controlled spending measures instituted in 2012.
"Our earnings guidance for 2012 remains suspended because of the ongoing Ohio regulatory proceedings. We have received an order from the Public Utilities Commission of Ohio regarding capacity charges, but a decision on the Electric Security Plan, or ESP, isn't expected until early August," Akins added.
In Friday's regular trading session, AEP is currently trading at $42.09, up $0.09 or 0.21% on a volume of 1.01 million shares.
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