American Electric Power Company (AEP) Q3 2024 earnings summary

Executive summary

• Q3 2024 operating earnings were $1.85 per share ($985 million), with GAAP earnings at $1.80 per share ($960 million), and year-to-date GAAP earnings up to $4.35 per share ($2.30 billion), driven by strong commercial and industrial load growth and favorable tax rulings.

• 2024 full-year operating earnings guidance narrowed to $5.58–$5.68 per share, with 2025 guidance at $5.75–$5.95 per share, supporting a new long-term EPS growth rate of 6%–8% off a 2025 base year.

• A $54 billion capital plan for 2025–2029 was announced, focused on regulated businesses and supporting reliability, demand growth, and economic development.

• Commercial load growth exceeded 10% year-over-year through Q3, with 20 GW of customer commitments through 2029, mainly from data centers and industrial customers, driving a projected 60% increase in peak load over six years.

• Growth was partially offset by regulatory refunds, higher compliance costs, and special items including severance, EPA coal rule impacts, and a $19 million SEC matter loss contingency.

Financial highlights

• Q3 2024 operating earnings per share increased to $1.85 from $1.77 in Q3 2023; year-to-date operating earnings rose to $4.38 per share from $4.02, with commercial sales up 10.1% year-to-date.

• Q3 2024 revenue was $5.4 billion, up from $5.3 billion; year-to-date revenue reached $15.0 billion, up from $14.4 billion.

• Sale of AEP OnSite Partners completed, generating over $318 million in net proceeds.

• FFO-to-debt at 14.7% for the 12 months ended September 30, 2024; debt-to-cap at 62.1%.

• Liquidity strong at $5.5 billion, supported by $6 billion in credit facilities; pension funding status at 99%.

Outlook and guidance

• 2024 operating earnings guidance narrowed to $5.58–$5.68 per share; 2025 guidance set at $5.75–$5.95 per share, supporting a 6%–8% long-term EPS growth rate.

• Customer rates expected to rise less than 3% annually system-wide from 2025–2029, subject to future generation needs.

• Dividend growth will be decoupled from earnings growth, targeting a payout ratio of 55%–65%.

• Equity support needed in 2025 and 2026; all funding alternatives under consideration.