AEP misses 4Q16 revenue estimates
Columbus, Ohio–based American Electric Power (AEP) reported its 4Q16 and 2016 financial results on January 26, 2017. It reported total revenue of $3.8 billion in the quarter, a rise of 5% over its revenue of $3.6 billion in 4Q15.
AEP witnessed positive retail sales growth for the first time in more than a year in 4Q16. Favorable weather and continued investment in its regulated business drove this growth.
For the last few quarters, AEP’s residential and commercial sales have posted strong growth. However, its industrial sales have taken a serious hit. In 4Q16, its electric deliveries to residential and commercial segments rose 8.8% and 5.8%, respectively, while its industrial sales reported a minor fall compared to 4Q15.
Warmer-than-normal weather in 2016 positively impacted AEP’s load growth, while low energy prices, a strong US dollar, and weakness in the global economy reduced the company’s overall load growth year-over-year. AEP’s total normalized load growth stayed near 0.3% in 4Q16 compared to 4Q15. For 2017, AEP has projected normalized load growth of 0.7% compared to 2016.
In 4Q16, economic factors such as GDP growth in AEP’s territories were well below the US national average. This trend may have negatively impacted the pace of AEP’s new customer additions in the quarter.