By Lisa Beilfuss
American Electric Power said earnings tumbled in its latest quarter as warm weather cut into demand and as low natural gas prices reduced the company's pricing power.
One of the nation's biggest electricity producers, American Electric services about 5.4 million customers across 11 states. Like other utilities, sharply lower natural gas prices have translated to lower electricity pricing and have resulted in bad bets made to hedge the cost of the fuel.
Meanwhile, a warm winter across parts of the country reduced demand for heat. The company also attributed lower demand to job losses across the natural resources and mining sectors.
The company said Thursday that strength in its transmission business helped offset those negative impacts. Chief Executive Nicholas Akins said 2016 is on track to be "slightly better" than 2015.
In all for the March quarter, American Electric reported a profit of $501.2 million, or $1.02 a share, down from $629.2 million, or $1.29 a year earlier. Revenue declined to $4.0 billion from $4.6 billion a year earlier.
Analysts projected $1.04 in earnings per share and $4.50 billion in sales.
Shares in the company declined 1.5% in early trading. Since the start of the year, the stock has gained 8.1%.
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