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COLUMBUS — Power company American Electric Power said Friday that its second-quarter earnings rose as higher rates in several states coupled with cost controls offset a 21 percent drop in sales to industrial customers.
AEP said it made $316 million, or 67 cents per share, for the quarter ended June 30 compared with $281 million, or 70 cents per share, in the year-ago quarter. Earnings pre share were down because the company issued new stock in the first quarter.
Discounting one-time charges, AEP made $321 million, or 68 cents per share, compared with $280 million, or 70 cents per share, a year ago.
Revenue fell to $3.2 billion from $3.5 billion a year ago.
Analysts surveyed by Thomson Reuters expected profit of 61 cents a share on revenue of $3.6 billion.
The company said increased rates in Virginia, Indiana, Oklahoma and Ohio along with new ability to recover fuel costs in Ohio helped drive profit higher in the quarter.
"But the effects of the weak economy are obvious," Michael Morris, AEP's chairman, president and CEO, said in a statement. "Electricity sold to industrial customers decreased from the same period last year. Off-system sales — electricity sold into the wholesale market — were down significantly from last year."
As has happened with other utilities, AEP has seen demand for electricity from industrial customers such as auto plants and steelmakers fall because of the recession. Sales to commercial and residential customers have been about flat.
Industrial demand has been particularly weak across the U.S. with sales falling 12 percent in the first quarter of this year compared with the first quarter of 2008, according to the Energy Information Administration. Total consumption nationwide is expected to fall 2 percent this year and rise 0.8 percent next year.
Morris told analysts on a conference call that AEP is starting to see signs that business from industrial customers and exporters are starting to pick up.
AEP also reaffirmed its earnings guidance of $2.75 to $3.05 per share for 2009. The guidance discounts one-time charges.
AEP shares rose 31 cents, or 1 percent, to $30.96 Friday. The shares have traded between $24 and $41.60 per share over the past 12 months.
Year to date, AEP said it has made $676 million, or $1.54 per share, compared with $854 million, or $2.13 per share, in last year. Discounting one-time items, AEP has made $681 million, or $1.55 per share, compared with $690 million, or $1.72 per share, last year.
Revenue so far this year totaled $6.7 billion compared with $7 billion for first half of 2008.
AEP is one of the nation's largest power companies with 5.2 million customers in 11 states.
