AMERICAN Electric Power reported a $0.1m drop in revenue for the fourth quarter at $3.3bln and a $86m lift in earnings to $238m.Among the largest electricity utilities in the US serving over 4m customers, AEP’s fourth quarter trend closely mirrored the 12 month figures which came in at $14.1bln in revenue and $1.3bln in earnings.A true reflection is the earnings per share which is down 0.47 cents at $2.96 ($3.43).″The best news is that we aren’t seeing a continued decline in sales,″ Michael G. Morris, AEP chairman, president and chief executive officer said.″Industrial sales in the fourth quarter were consistent with what we saw in the third quarter and actually showed a slight up-tick in December, although one month definitely doesn’t represent a trend.″Residential and commercial sales ~ an area of significant year-to-year growth before the recession ~ have stalled but haven’t declined as much as expected.″These factors have us cautiously optimistic for improvement in the months ahead.″The utility expects to earn between $2.80 and $3.20 a share in 2010.AEP reported ongoing earnings from utility operations for the year increased by $109m from 2008 because of increased retail rates and increases in transmission and other margins.These improvements were partially offset by lower off-system sales, lower sales to industrial customers and higher expenses.
AEP’s River operations results were $9m lower during fourth-quarter 2009 than in the same period the prior year because of lower grain rates and reduced imports, which weakened freight demand.This was partially offset by lower operating expenses.For the year, results were $8m lower than 2008 because of the continued lack of imports, which reduced northbound loadings, freight demand and rates.Generation and marketing, which includes AEP’s non-regulated generating, marketing and risk management activities, primarily in the Electric Reliability Council of Texas (ERCOT) area, decreased to $8m in the fourth-quarter 2009 from $22m during the same period in 2008, primarily because of reduced gross margins from marketing activities.For the year, earnings decreased to $41m from $65m in 2008 because of lower gross margins at the Oklaunion Power Station, attributed primarily to lower power prices in the ERCOT region, and decreased generation from AEP’s wind farms.All other, which includes the parent company and other investments, was lower in 2009 compared with 2008 primarily because of lower interest income and favourable tax adjustments in the prior year, partially offset by lower interest expense, all at the parent.
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