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S&P 500 (NYSE:SPY) component American Electric (NYSE:AEP) will unveil its latest earnings on Wednesday, October 24, 2012. American Electric Power is a public utility holding company that provides electric service, consisting of generation, transmission, and distribution, to its retail customers through subsidiaries.
American Electric Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of $1.02 per share, a decline of 12.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $1.06. Between one and three months ago, the average estimate moved down. It also has dropped from $1.04 during the last month. Analysts are projecting profit to rise by 2.6% compared to last year’s $3.04.
Past Earnings Performance: Last quarter, the company topped estimates by 0 cents, coming in at profit of 77 cents per share against a mean estimate of net income of 72 cents. The company fell in line with estimates in the first quarter.
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Stock Price Performance: Between July 25, 2012 and October 18, 2012, the stock price rose $4.05 (9.8%), from $41.22 to $45.27. The stock price saw one of its best stretches over the last year between July 9, 2012 and July 17, 2012, when shares rose for seven straight days, increasing 2.5% (+$1.03) over that span. It saw one of its worst periods between April 2, 2012 and April 10, 2012 when shares fell for six straight days, dropping 4.3% (-$1.66) over that span.
Wall St. Revenue Expectations: On average, analysts predict $4.6 billion in revenue this quarter, a rise of 7% from the year-ago quarter. Analysts are forecasting total revenue of $15.45 billion for the year, a rise of 2.3% from last year’s revenue of $15.1 billion.
A Look Back: In the second quarter, profit rose 2.8% to $362 million (75 cents a share) from $352 million (73 cents a share) the year earlier, exceeding analyst expectations. Revenue fell 1.6% to $3.55 billion from $3.61 billion.
This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 75.7% in the fourth quarter of the last fiscal year and 9.9% in the first quarter before increasing again in the second quarter.
On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 2.8% in the first quarter and dropped again in the second quarter.
Analyst Ratings: With nine analysts rating the stock a buy, none rating it a sell and eight rating the stock a hold, there are indications of a bullish stance by analysts.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 0.7 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, a ratio less than one could indicate a company may have difficulty meeting current obligations. The company improved this liquidity measure from 0.66 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 6.4% to $4.48 billion while liabilities rose by 1% to $6.41 billion.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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