For the full year, EPS came in at $3.23 on revenues of $15.4 billion, compared with consensus estimates calling for EPS of $3.19 on revenues of $15.6 billion.
Quarterly and full-year EPS exclude a gain due to the reversal of a third-quarter Texas regulatory disallowance of $0.11 a share.
AEP affirmed earlier guidance for 2014, saying it expects operating EPS in the range of $3.20 to $3.40. The consensus estimate calls for $3.33 on revenues of $16.04 billion.
The company’s CEO said:
AEP shareholders received a 14.2 percent total return in 2013, including dividends, which exceeded the total shareholder return of 7.8 percent for the S&P 500 Electric Utilities Index. We increased our annual dividend by 6.4 percent, and our debt to total capitalization improved to 54.3 percent, the lowest ratio in 15 years. Additionally, our qualified pension plan funding reached 99 percent.
AEP’s dividend yield is 4.3%, and the utility pays a quarterly dividend of $0.50 a share. More than 90% of the company’s revenues have been generated by regulated assets that provide predictable cash flow and operating margins.
Power company deregulation in Ohio, though, is already having an impact on revenues and earnings, and the company plans to offset a significant portion of those lost dollars with increased revenues and earnings in its transmission segment.
The company’s generating capacity totals 37,600 megawatts, of which 71% (about 26,700 megawatts) are coal-fired. AEP has reduced its coal-fired generation from 82% just three years ago and about doubled its natural gas-fired capacity to 17%. By 2016, AEP expects to retire another 5,500 megawatts of coal-fired generation. The company also says it needs new or enhanced environmental controls or a switch to natural gas on another 11,000 megawatts.
Shares traded down fractionally in the Monday premarket, at $46.75 in a 52-week range of $41.83 to $51.60. Thomson Reuters had a consensus analyst price target of around $50.10 before this report.
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