American Electric Power 2Q Up 2.8% on Warmer Weather, Lower Costs

07/20/2012| 08:09am US/Eastern

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   By Chelsea Stevenson 
 

American Electric Power Co. Inc's. (>> American Electric Power Company, Inc.) second-quarter profit rose 2.8% as the company saw warmer weather and took a more disciplined approach to controlling costs.

AEP is one of the largest U.S. electric utilities and has seen growth in recent quarters, mostly from industrial demand, but the industry faces a considerable climb to pre-recession levels. In April it said it would form a joint venture with Great Plains Energy Inc. (>> Great Plains Energy Incorporated) to build $466 million in transmission projects, as an effort to take advantage of an increasingly attractive market in shipping electricity across the country.

American Electric Power posted a profit of $362 million, of 75 cents a share, compared with $352 million, or 73 cents a share, in the year-ago quarter. The latest quarter includes a pre-tax severance provision related to the company's cost restructuring program, which was launched earlier this year. Operating earnings rose to 77 cents a share from 73 cents. Revenue remained flat at $3.6 billion.

Analysts polled by Thomson Reuters most recently expected earnings of 71 cents a share on revenue of $3.57 billion.

Earnings from utility operations rose 4.3% to $364 million. Profit from transmission operations rose 33% to $8 million, while the AEP River operations swung to a profit $3 million from last year's loss of $1 million.

The company said its guidance for the year remains suspended because of ongoing Ohio regulatory proceedings. The company has received an order from the state's utility commission regarding capacity charges. A decision is expected in early August.

Shares closed Thursday at $42 and were inactive premarket. The stock is up 12% in the past 12 months.

Write to Chelsea Stevenson at chelsea.stevenson@dowjones.com

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