American Electric Power Company (AEP) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating earnings were $1.25 per share ($662M), up 12% year-over-year, while GAAP earnings were $0.64 per share ($340M), down from $1.01 per share in Q2 2023, supported by strong operational execution and commercial load growth.

• 2024 operating earnings guidance reaffirmed at $5.53–$5.73 per share, with a long-term growth rate target of 6%–7%.

• Customer commitments for over 15 GW of incremental load by 2030, driven by robust data center demand and 12.4% Q2 commercial load growth.

• Bill Fehrman to become President and CEO effective August 1, 2024, ensuring continuity in strategic direction.

• Q2 GAAP earnings impacted by one-time refund provisions, EPA CCR compliance costs, and severance expenses, partially offset by favorable rate proceedings and higher transmission revenues.

Financial highlights

• Q2 2024 GAAP EPS was $0.64 (net income $340M), down from $1.01 in Q2 2023; operating EPS was $1.25 (operating earnings $662M), up from $1.13.

• Year-to-date 2024 GAAP EPS was $2.55 ($1.34B), up from $1.78 ($918M) YTD 2023; operating EPS was $2.52 ($1.33B), up from $2.24 ($1.15B).

• Q2 2024 consolidated revenues were $4.6B, up from $4.4B in Q2 2023; year-to-date revenue reached $9.6B, up from $9.1B.

• Adjusted items in Q2 included mark-to-market impacts, regulatory liabilities, severance charges, and EPA CCR compliance costs.

• Commercial load growth reached 12.4% year-over-year in Q2 2024; total normalized GWh sales up 4.0%.

Outlook and guidance

• 2024 operating earnings guidance reaffirmed at $5.53–$5.73 per share; long-term EPS growth targeted at 6%–7% annually.

• Capital plan of $43B for 2024–2028, with 100% allocated to regulated businesses and 22% to renewables.

• Expects significant incremental load growth, especially from data centers, with over 15 GW of customer commitments by 2030.

• Plans to update capital spend and financing strategy in the fall to address large load opportunities.

• Rate base CAGR projected at 7.2% over the forecast period; average customer rates expected to rise ~3% annually.