A month has gone by since the last earnings report for American Electric Power (AEP). Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AEP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

American Electric's Q3 Earnings Beat Estimates, Revenues Rise Y/Y

American Electric reported third-quarter 2024 adjusted earnings per share (EPS) of $1.85, which beat the Zacks Consensus Estimate of $1.78 by 3.9%. The bottom line also improved 4.5% from earnings of $1.77 per share recorded in the year-ago quarter.

The company reported GAAP earnings of $1.80 per share compared with the year-ago quarter’s figure of $1.83.

American Electric’s Total Revenues

Operating revenues of $5.43 billion rose 2.4% from the year-ago quarter’s level of $5.30 billion. It also surpassed the Zacks Consensus Estimate of $5.39 billion.

The company reported GAAP revenues of $5.42 billion, which improved 1.5% year over year.

AEP’s Segmental Performance

Vertically Integrated Utility Operations: Adjusted earnings increased to $572.4 million from $520 million in the year-ago period.

Transmission & Distribution Utilities: Adjusted earnings totaled $245.2 million, up from $206 million in the year-ago quarter.

AEP Transmission Holdco: This segment generated adjusted earnings of $214.7 million, up from $202.9 million in the year-ago quarter.

Generation and Marketing: Adjusted earnings amounted to $99.2 million, up from $92.8 million in the year-ago quarter.

All Other: The segment reported a loss of $146.1 million, wider than the loss of $97.9 million in the year-ago period.

Highlights of AEP’s Result

Electricity sales volume from Vertically Integrated Utilities dropped 1% year over year, while Transmission & Distribution Utilities’ electricity sales volume improved 4.1%.

Total expenses were $4.05 billion, up 1.5% from the year-ago level.

Interest expenses amounted to $498.8 million, up 6.1% from the year-ago quarter’s figure.

AEP’s Guidance

American Electric has updated its 2024 operating earnings guidance. It now expects to generate earnings in the band of $5.58-$5.68 per share, narrower than its previous guidance of $5.53-$5.73. The Zacks Consensus Estimate for earnings is pegged at $5.60 per share, which lies below the mid-point of the company’s new projected range.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

Currently, AEP has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AEP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

AEP is part of the Zacks Utility - Electric Power industry. Over the past month, CMS Energy (CMS), a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended September 2024 more than a month ago.

CMS Energy reported revenues of $1.74 billion in the last reported quarter, representing a year-over-year change of +4.2%. EPS of $0.84 for the same period compares with $0.61 a year ago.

For the current quarter, CMS Energy is expected to post earnings of $0.86 per share, indicating a change of -18.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.7% over the last 30 days.

CMS Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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