Deliver Your News to the World

AEP Refines 2009 Ongoing Earnings Guidance to Reflect Regulatory, Economic Factors


COLUMBUS, Ohio. – American Electric Power (NYSE: AEP) is refining its ongoing earnings guidance range for 2009, citing the potential earnings impact of a variety of regulatory and economic factors.

The company anticipates that 2009 ongoing earnings will be between $3.00 and $3.40 per share. Ongoing earnings guidance for 2008 is unchanged, remaining at $3.15 to $3.25 per share. Ongoing earnings represent earnings from continuing operations, which exclude special or one-time items included in the earnings prepared in accordance with Generally Accepted Accounting Principles. AEP management will discuss 2009 ongoing earnings guidance in meetings with investors at the EEI Financial Conference that begins today in Phoenix.

“We have established a relatively wide range for our 2009 guidance to cover various potential regulatory outcomes as well as the decision on our Electric Security Plan in Ohio,” said Michael G. Morris, AEP chairman, president and chief executive officer. “We expect the decision from the Public Utilities Commission of Ohio after the first of the year. We also have lowered our earnings expectations for 2009 to reflect current economic realities.

“It’s anticipated that the economy will remain soft in 2009, and we expect that our sales for 2009 will be about the same as 2008 – although the geographic diversity of our 11-state service area helps to mitigate the effect of the economic slowdown,” Morris said. “We’re uncertain when the economy will return to the more robust growth we have seen in recent years. Because of that uncertainty, we are managing our cash flow, have tightened controls on spending, and – as we announced in late October – have reduced our capital expenditures budget for 2009 by $750 million, a reduction of more than 20 percent. The reduction in capital expenditures will have an impact on our earnings growth, so we are revising our long-term growth rate to between 4 percent and 6 percent annually.”

In October 2007, AEP established a 2009 ongoing earnings guidance range of between $3.20 and $3.50 per share and projected long-term growth of between 5 percent and 9 percent annually.

“Once the economy rebounds and earnings from our transmission investments grow, we should move back into that 5 percent to 9 percent range,” Morris said. “Our focus, as always, is on ensuring we have sufficient reliable energy production and delivery infrastructure to meet our customers’ needs, both today and in the future. We will continue to invest in those areas and to manage our commodity costs. But it’s also important that we improve the systems for cost recovery provided by utility regulations in our states. That’s a discussion that we will be having with our regulators.”


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.