American Electric Power Reaffirms 2025 Outlook With Minimal Tariff Risk On $54B Grid Investment Plan

On Thursday, American Electric Power Company, Inc. AEP reported first-quarter revenue of $5.46 billion, beating the consensus of $5.17 billion. Adjusted EPS of $1.54 beat the consensus of $1.40.

Total energy distribution rose 6.9% year over year (Y/Y) in the Vertically Integrated Utilities segment and rose 10.7% Y/Y in the Transmission & Distribution Utilities segment. 

Commercial load rose by 12.3% in the quarter vs. 10.6% prior year quarter, on large-load customer demand in Indiana, Ohio, Oklahoma and Texas.

Adjusted operating earnings rose to $823.3 million in the quarter from $670.4 million a year ago. 

Adjusted operating earnings from Vertically Integrated Utilities rose to $349.9 million from $300.3 million in the prior year, and AEP Transmission Holdco grew to $234.6 million from $208.7 million in the prior year’s quarter.

FY25 Outlook: American Electric Power reaffirmed FY25 adjusted EPS of $5.75 – $5.95 vs consensus of $5.87.

The company continues to see a long-term growth rate outlook of 6% to 8%.

Bill Fehrman, AEP president and chief executive officer, said, “We continue to successfully execute on initiatives to meet our five-year, $54 billion capital needs and are focused on putting dollars to work expanding and improving our power grid and bringing on new generation resources.”

”Completing our anticipated equity needs for the next five years through our forward stock offering and the expected closing of the minority interest transmission transaction, which offer significant benefits to our customers and shareholders alike, gives us the foundation we need to bring our capital plan to fruition.”

”With our team’s consistent focus on accountability, and commitment to finding innovative solutions to meet customers’ power needs, we continue to see potential for an additional $10 billion of investments over the next five years. In addition, we have determined that the direct tariff exposure on our $54 billion capital plan is minimal at approximately 0.3%.”

Investors can gain exposure to the stock via First Trust EIP Carbon Impact ETF ECLN and Themes ETF Trust Themes Uranium & Nuclear ETF URAN.

Price Action: AEP shares closed at $107.55 on Tuesday.

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