AEP fourth-quarter earnings drop 41 percent

Tuesday, January 22nd 2002, 12:00 am
By: News On 6

COLUMBUS, Ohio (AP) _ American Electric Power said Tuesday its fourth-quarter earnings, excluding special items, dropped 41 percent because of mild weather and a weak economy.

The utility had ongoing quarterly earnings of $113.7 million, or 35 cents per share, falling short of the 39 cents per share predicted by analysts polled by Thomson Financial/First Call. A year ago, the company had ongoing earnings of $193.6 million, or 62 cents per share.

Net earnings were $51.9 million, compared with a loss of $222.3 million in the fourth quarter 2000. Revenue was $14.2 billion, up from $10.9 billion a year ago.

Columbus-based AEP also lowered its 2002 earnings forecast to between $3.60 and $3.75 per share from the previous range of $3.70 and $3.80 per share, citing the recession and the possible issuance of stock to fund new growth and strengthen its balance sheet.

In trading Tuesday afternoon on the New York Stock Exchange, AEP's stock was down 64 cents to $42.36.

For the year, AEP's earnings, excluding special items, were $1.09 billion, or $3.38 per share. That compares with $870.7 million, or $2.71 per share, in 2000.

Net earnings were $970.8 million, or $3.01 per share, up from $267.1 million, or 83 cents per share, in 2000. The 2001 earnings included extraordinary items such as costs related to the June 2000 completion of AEP's merger with Central South West Power Corp. and the purchase of Houston Pipe Line.

Last week, a federal appeals court ordered the Securities and Exchange Commission to review AEP's $4.37 billion acquisition of Central South West Power. The court said the SEC failed to adequately explain its conclusion that the merger complied with a 1935 law aimed at protecting consumers and stockholders.

The merger made AEP one of the country's largest power companies with 5 percent of the market.

The combined company serves customers in Ohio and 10 other states: Arkansas, Indiana, Kentucky, Louisiana, Michigan, Oklahoma, Tennessee, Texas, Virginia and West Virginia.

AEP also said it didn't expect a ``long-term negative impact'' from the bankruptcy of Enron Corp. AEP previously said it could lose up to $50 million from business deals with Enron.