American Electric Power Company Stock Earnings Reports

Key points for investors: 1) Results and near-term guidance — AEP reported Q3 2025 operating earnings of $1.80/share and reaffirmed its 2025 full‑year operating earnings range of $5.75–$5.95/share (guiding to the upper half). Management provided 2026 operating earnings guidance of $6.15–$6.45/share (midpoint $6.30). 2) Upgraded long‑term outlook — AEP introduced a materially higher long‑term operating earnings growth target of 7%–9% annually for 2026–2030 (9% CAGR over the five‑year period), with growth expected to be in the lower half of the range in the first two years and at/above the high end in 2028–2030. 3) Large capital plan — AEP unveiled a $72 billion 5‑year capital plan (over 30% increase vs. prior plan) driving a ~10% 5‑year rate‑base CAGR; roughly two‑thirds of spend is transmission and generation, and nearly 90% of investment recovery is expected through reduced lag mechanisms (formula rates, forward‑looking test years, riders/trackers). 4) Demand drivers and contracts — Management cites exceptional load growth: system peak projected to reach ~65 GW by 2030, including 28 GW of incremental contracted load (up from 24 GW) backed by ESAs/LOAs (≈80% data centers, 20% industrial). Management emphasizes the conservative, contract‑backed nature of the 28 GW. 5) Transmission advantage — AEP highlights its ultra‑high‑voltage (765 kV) transmission backbone (2,100+ miles, ~90% of U.S. 765 kV lines) as a competitive moat attracting large loads; transmission is expected to generate >50% of 2026 operating earnings and transmission rate base to exceed $50B by 2030. 6) Financing and credit — Financing plan anchored by strong cash flow; modest growth equity needs of ~$5.9B (mostly back‑end of plan). Targets FFO/Debt ~14%–15% (S&P metric at 15.7% this quarter; Moody’s near target by end of 2026). Only ~25% of debt matures through 2030. 7) Affordability and regulation — Forecast average residential rate increases ≈3.5% annually through 2030 (below recent inflation); management highlighted recent constructive state legislative/regulatory outcomes (Ohio HB15, Oklahoma SB998, Texas HB5247) and ongoing base rate cases. 8) Resource adequacy & generation — Multiple generation filings and approvals (combined‑cycle units, IRP filings ~5.9 GW for APCo) and exploration of SMR opportunities; emphasis on balanced generation additions to maintain reliability. 9) Shareholder returns — Board raised dividend by 2% for next year; company targets a 50%–60% payout ratio, intends consistent dividend growth while prioritizing capital deployment. 10) Capital allocation discipline — Management emphasizes 'ruthless' capital prioritization, no planned asset sales to fund the plan at this time, and active supply‑chain/supplier agreements for turbines and high‑voltage equipment to support execution.