American Electric Power says its 2Q profit more than doubled amid unusually hot weather

COLUMBUS, Ohio – American Electric Power Co. Inc. said Friday its second-quarter earnings more than doubled amid some unusually warm weather but narrowly missed Wall Street expectations.

AEP is one of the nation’s largest power companies, with more than 5 million customers from Texas to Michigan.

The Columbus-based power provider reported net income of $352 million, or 73 cents per share, for the three months that ended June 30. That compares with net income of $136 million, or 28 cents per share, for the same period a year ago, when the numbers were depressed by charges related to the elimination of nearly 2,500 jobs.

Analysts surveyed by FactSet had expected higher earnings of 75 cents per share.

Its shares fell 19 cents to $36.97 in morning trading.

AEP said it benefited from rate changes and favourable weather in parts of its service area, along with increased margins from wholesale activity, but that its storm expenses were higher than the year-ago amount.

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“We had solid financial performance in the second quarter, driven by favourable rate outcomes and strong off-system sales,” AEP chairman and CEO Michael Morris said. “While weather in our eastern states was milder in the second quarter than last year, both our eastern and western states experienced warmer than normal weather.”

AEP’s revenue rose to $3.6 billion from $3.4 billion. Analysts anticipated $3.51 billion in revenue.

The company reported no one-time charges for the second quarter this year. During the same period in 2010, it said it would have made $355 million without one-time charges for severance and other restructuring costs linked to the job cuts.

AEP and other utilities struggled as power demand fell during the recession, especially among industrial customers.

“We are keeping an eye on the economy, which continues to show some signs of economic improvement in our service territories, particularly in the west,” Morris said.

Year to date, AEP reported net income of $705 million, or $1.46 per share, compared with $480 million, or $1.00 per share, in the first half of 2010. Revenue rose to $7.3 billion from $6.9 billion.

The company maintained its 2011 forecast for earnings of $3.00 to $3.20 per share. Analysts expect $3.13 per share.