American Electric Power Q2: Mixed Performance, 2023 EPS Outlook Reaffirmed

American Electric Power Co Inc AEP reported Q2 2023 operating EPS of $1.13, down from $1.20, beating the consensus of $1.12.

Revenues of $4.40 billion came below $4.6 billion a year ago and missed the consensus of $4.76 billion. 

Results reflect the timing of higher interest and O&M expenses and milder temperatures. 

The company's total kWhs fell 5.2% Y/Y in the Vertically Integrated Utilities segment and 1.7% Y/Y in Transmission & Distribution Utilities segment. 

"In the second quarter, we received regulatory approval to add nearly 2,000 megawatts of new wind and solar generation to help meet the projected power needs of customers in Oklahoma, Arkansas and Louisiana. We now have approvals in place for $5.2 billion of our five-year, $8.6 billion regulated renewables capital plan. We've filed for approval of $1.7 billion in additional renewable projects and have active RFPs for resources in other jurisdictions. We also continue to see positive earnings contributions from the transmission investments we're making to improve reliability and service for our customers," said Julie Sloat, president and CEO.

2023 Outlook Reaffirmed: AEP reaffirmed operating EPS of $5.19-$5.39 (vs. consensus $5.27), with a long-term growth rate of 6% to 7% and FFO/Debt target of 14% to 15%.

The company expects to conclude the sale of its 1,365-megawatt unregulated renewables portfolio to IRG Acquisition Holdings in August 2023.

AEP says it is on track with the sales processes for the AEP Energy retail and AEP OnSite Partners distributed resources businesses and its 50% stake in the New Mexico Renewable Development joint venture.

Price Action: AEP shares are trading lower by 1.6% at $86.14 on the last check Thursday.

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