Core Insights - The article discusses the mission of Guiding Mast Investments, which focuses on helping investors accumulate wealth through dividend-paying stocks [1] - The author has extensive experience as a Registered Investment Advisor and has authored multiple financial books, indicating a strong background in investment analysis [1] Company Overview - Guiding Mast Investments is dedicated to providing timely selections of dividend-paying stocks to its clients [1] - The company aims to assist investors in navigating their financial journeys effectively [1] Author's Background - The author has a diverse professional background, including 15 years as a corporate manager at Georgia-Pacific Corp and experience in various business operations [1] - The author was appointed by President Ronald Reagan to the National Advisory Council overseeing the Small Business Administration, highlighting a significant level of expertise and recognition in the field [1]

Core Points - American Electric Power Company, Inc. (AEP) reported first-quarter 2025 operating earnings per share (EPS) of $1.54, exceeding the Zacks Consensus Estimate of $1.39 by 10.8% and increasing 21.3% from $1.27 in the same quarter last year [1] - AEP's total revenues for the quarter were $5.46 billion, an 8.7% increase from $5.03 billion in the previous year, and also surpassed the Zacks Consensus Estimate of $5.34 billion by 2.4% [2] Segment Performance - Vertically Integrated Utility Operations reported operating earnings of $349.9 million, up from $300.3 million year-over-year [3] - Transmission & Distribution Utilities generated operating earnings of $192.3 million, an increase from $150.3 million in the prior year [3] - AEP Transmission Holdco's operating earnings rose to $234.6 million from $208.7 million year-over-year [3] - Generation and Marketing segment reported operating earnings of $76.3 million, up from $65.4 million in the same quarter last year [4] - The All Other segment reported an operating loss of $29.8 million, which was an improvement from a loss of $54.3 million in the previous year [4] 2025 Guidance - AEP reaffirmed its 2025 operating earnings guidance, expecting EPS in the range of $5.75-$5.95, with the Zacks Consensus Estimate at $5.86, slightly above the midpoint of the projected range [5] - The company anticipates a long-term EPS growth rate of 6-8% [5] Zacks Rank - AEP currently holds a Zacks Rank 3 (Hold) [6]

Core Insights - American Electric Power (AEP) reported a revenue of $5.46 billion for Q1 2025, marking a year-over-year increase of 9.3% and exceeding the Zacks Consensus Estimate of $5.34 billion by 2.40% [1] - The company's earnings per share (EPS) for the same quarter was $1.54, up from $1.27 a year ago, and also surpassed the consensus EPS estimate of $1.39 by 10.79% [1] Financial Performance Metrics - Total Energy Sales for Retail Electric - Transmission & Distribution Utilities reached 23,527 GWh, exceeding the estimated 23,292.62 GWh [4] - Total Energy Sales for Retail Electric - Vertically Integrated Utilities was 23,934 GWh, above the estimated 23,696.08 GWh [4] - Total Energy Sales for Wholesale Electric - Transmission & Distribution Utilities amounted to 667 GWh, surpassing the estimated 599.76 GWh [4] - Total Energy Sales for Transmission & Distribution Utilities totaled 24,194 GWh, exceeding the estimated 23,892.38 GWh [4] - Total Energy Sales for Wholesale Electric - Vertically Integrated Utilities was 4,791 GWh, above the estimated 3,900.14 GWh [4] - Total Energy Sales for Vertically Integrated Utilities reached 28,725 GWh, exceeding the estimated 27,596.21 GWh [4] Operating Earnings - Operating Earnings (non-GAAP) for Vertically Integrated Utilities was $349.90 million, compared to the average estimate of $340.94 million [4] - Operating Earnings (non-GAAP) for Transmission & Distribution Utilities was $192.30 million, slightly below the average estimate of $195.14 million [4] - Operating Earnings (non-GAAP) for AEP Transmission Holdco was $234.60 million, exceeding the average estimate of $209.59 million [4] - Operating Earnings (non-GAAP) for Generation & Marketing was $76.30 million, significantly above the average estimate of $41.99 million [4] - Operating Earnings (non-GAAP) for Corporate and Other was -$29.80 million, better than the average estimate of -$53.16 million [4] - Operating Earnings (GAAP) for Vertically Integrated Utilities was $324.10 million, below the average estimate of $405.56 million [4] Stock Performance - AEP shares have returned +5.8% over the past month, while the Zacks S&P 500 composite has changed by +11.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Performance - American Electric Power Company reported a significant increase in revenue, reaching $X billion, representing a Y% growth compared to the previous quarter[1]. - Reported GAAP Earnings for the three months ended March 31, 2025, were $800.2 million, compared to $1,003.1 million for the same period in 2024, reflecting a decrease of approximately 20.2%[30][32]. - Operating Earnings for the three months ended March 31, 2025, were $823.3 million, compared to $670.4 million for the same period in 2024, indicating an increase of approximately 22.8%[30][32]. - Total revenues for the three months ended March 31, 2025, were $5,463.4 million, an increase of 8.7% compared to $5,025.7 million in the same period of 2024[186]. - Operating income for the same period was $1,284.2 million, up from $1,172.6 million in 2024, reflecting a year-over-year increase of 9.5%[186]. - Net income attributable to AEP common shareholders for Q1 2025 was $800.2 million, a decrease of 20.2% from $1,003.1 million in Q1 2024[186]. - Total expenses rose to $345.9 million in Q1 2025, up from $319.6 million in Q1 2024, with significant increases in other operation and maintenance expenses by $28 million[207]. Customer Base and Sales - The company has expanded its customer base, now serving Z million customers, an increase of A% year-over-year[1]. - AEP's commercial sales increased due to new data processor loads and economic development, reflecting a positive trend in customer demand[48]. - Retail electricity sales increased to 23,934 million KWh in Q1 2025, up 3.5% from 23,119 million KWh in Q1 2024[122]. - Total KWh sales for Transmission and Distribution Utilities rose to 24,194 million KWh in Q1 2025, compared to 21,853 million KWh in Q1 2024, marking a 10.6% increase[128]. - Total retail KWh sales for the three months ended March 31, 2025, were 10,529 million KWh, up from 9,260 million KWh in the same period of 2024, an increase of 13.7%[200]. Investments and Acquisitions - AEP is investing in new technologies, including renewable energy projects, with a target of generating D MW from wind and solar sources by 2026[1]. - The company has completed the acquisition of Diversion, adding 201 MW of wind generation capacity in Texas, enhancing its renewable portfolio[1]. - AEP announced a partnership to acquire a 19.9% noncontrolling interest in OHTCo and IMTCo for $2.82 billion, supporting a $54 billion capital plan for 2025-2029[36]. - Transource Energy's investment in the Valley Link project is estimated at $1.1 billion, part of a $3 billion investment for regional electric transmission upgrades[37]. - AEP executed a purchase agreement for 100 MWs of solid oxide fuel cells, with an option to acquire up to 1,000 MWs by the end of 2025[39]. Future Guidance and Strategic Plans - Future guidance indicates expected earnings per share (EPS) growth of B% for the next fiscal year, with projected revenues of $C billion[1]. - AEP plans to expand its market presence in the southeastern region, targeting an increase in service coverage by E% over the next three years[1]. - The company is actively pursuing strategic partnerships and joint ventures to enhance its transmission capabilities, aiming for a F% increase in transmission capacity by 2025[1]. - AEP's capital expenditure for the next year is projected to be $I billion, focusing on infrastructure improvements and technology upgrades[1]. - Management forecasts approximately $11.5 billion in capital expenditures for 2025, with an additional $42.9 billion planned for 2026 through 2029[163]. Sustainability and Regulatory Compliance - The company is committed to sustainability, with plans to reduce carbon emissions by H% by 2030, aligning with regulatory requirements[1]. - AEP's substantial capital investment program aims to comply with environmental control requirements, though future regulatory changes are unpredictable[88]. - AEP is evaluating the economic feasibility of complying with new environmental rules, which may lead to accelerated depreciation and impairment of assets[90]. - Compliance with environmental regulations may require significant capital investments, potentially impacting future net income and cash flows[107]. - The Federal EPA announced four major new rules in April 2024 that will materially impact AEP's operations and require significant environmental investments[91]. Financial Position and Liquidity - AEP's total debt increased to $46.34 billion, with a debt-to-total capital ratio of 62.8% as of March 31, 2025[141]. - Net Available Liquidity was approximately $3.8 billion, with total liquidity sources amounting to $6.26 billion[144]. - AEP's common equity stood at $27.32 billion, representing 37.1% of total capitalization[141]. - AEP's total equity as of March 31, 2025, was $27,364.0 million, an increase from $26,986.1 million as of December 31, 2024[190]. - The company reported a cash flow hedge net of tax of $23.1 million in Q1 2025, compared to a loss of $6.2 million in Q1 2024[187]. Risks and Challenges - AEP's financial results are subject to various risks, including changes in economic conditions, regulatory changes, and market volatility, which could impact future performance[24]. - The impact of extreme weather conditions and natural disasters poses significant risks, including potential litigation and recovery costs[24]. - AEP is involved in various litigation matters that could impact future net income and cash flows[86]. - AEP's management does not undertake any obligation to update forward-looking statements except as required by law, indicating a focus on current conditions[21].

Group 1: Earnings Performance - American Electric Power (AEP) reported quarterly earnings of $1.54 per share, exceeding the Zacks Consensus Estimate of $1.39 per share, and up from $1.27 per share a year ago, representing an earnings surprise of 10.79% [1] - AEP posted revenues of $5.46 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.40%, compared to year-ago revenues of $5 billion [2] Group 2: Stock Performance and Outlook - AEP shares have increased approximately 16.5% since the beginning of the year, while the S&P 500 has declined by 3.9% [3] - The current consensus EPS estimate for the upcoming quarter is $1.24 on revenues of $4.94 billion, and for the current fiscal year, it is $5.86 on revenues of $20.91 billion [7] Group 3: Industry Context - The Utility - Electric Power industry is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - AEP has surpassed consensus EPS estimates three times over the last four quarters, indicating strong performance relative to expectations [2]

Financial Data and Key Metrics Changes - The company reported first quarter 2025 operating earnings of $1.54 per share, totaling $823 million, which is a 20% increase compared to the same period in 2024 [9][24] - The company reaffirmed its 2025 operating earnings guidance range of $5.75 to $5.95 per share, with a long-term operating earnings growth rate of 6% to 8% [9][39] - GAAP earnings for the first quarter were $1.50 per share, down from $1.91 per share in 2024, primarily due to a charge related to the write-off of deferred costs [22][23] Business Line Data and Key Metrics Changes - Operating earnings for vertically integrated utilities were $0.66 per share, up $0.09 from the previous year, driven by favorable weather and rate changes [25] - The transmission and distribution utilities segment earned $0.36 per share, up $0.07 from last year, supported by rate changes and higher transmission revenue [25] - Generation and marketing produced $0.14 per share, up $0.02 from last year, with favorable retail and wholesale margins [26] Market Data and Key Metrics Changes - The company experienced a 12.3% growth in commercial load in the first quarter of 2025 compared to the same period last year [10] - Total retail load growth is expected to accelerate from 3% in 2024 to nearly 9% in 2025, marking the largest growth rate since the late 1960s [28] - The company anticipates annual retail load growth of between 8% to 9% through 2027, equating to approximately 52 million incremental megawatt hours [28] Company Strategy and Development Direction - The company is committed to investing $54 billion over the next five years to meet the needs of 5.6 million customers across 11 states [5][9] - The capital plan includes customer commitments for over 20 gigawatts of incremental load by 2030, driven by data center demand and economic development [11][12] - The company is focused on reducing regulatory lag and enhancing customer affordability through proactive regulatory filings and legislative support [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential, citing significant demand for power and a robust pipeline of projects [16][20] - The company is well-positioned to participate in the electric infrastructure super cycle, with a focus on meeting increasing electric demand [16] - Management highlighted the importance of maintaining a strong balance sheet to support capital spending needs and future growth opportunities [9][36] Other Important Information - The company has secured approximately 80% of its rate-related revenue for 2025, indicating strong regulatory support [16][17] - A significant equity issuance of $2.3 billion was completed to address anticipated equity needs through 2029 [22][36] - The company is actively engaged in legislative efforts to improve recovery and customer affordability [20] Q&A Session Summary Question: How are conversations going in West Virginia regarding securitization? - Management reported positive discussions and is optimistic about achieving a favorable outcome in the upcoming hearings [42][44] Question: Are there any pullbacks from hyperscalers like Microsoft? - Management noted that despite Microsoft's delay, there is still robust demand from other customers, with over 500 existing and potential customers looking to connect to the system [46][48] Question: How does the company reconcile current sales trends against the 2025 forecast? - Management indicated that while near-term earnings impacts may be muted, the rapid addition of commercial and industrial load creates additional growth opportunities [52][54] Question: What is the impact of Ohio's new legislation on the company's regulatory strategy? - Management expressed that the new legislation supports capital investment growth and promotes timely recovery of investments, which is advantageous for the company [56][58] Question: How will the company finance the potential $10 billion upside in capital spending? - Management stated that they have already prefunded much of their equity needs and have various levers to pull, including potential asset sales and hybrid financing options [104][106]

Financial Data and Key Metrics Changes - The company reported first quarter 2025 operating earnings of $1.54 per share, totaling $823 million, which is a 20% increase compared to the same period last year [8][22] - The company reaffirmed its 2025 operating earnings guidance range of $5.75 to $5.95 per share and a long-term operating earnings growth rate of 6% to 8% [8][38] - GAAP earnings for the first quarter were $1.50 per share, down from $1.91 per share in 2024, primarily due to a charge related to the write-off of previously deferred costs [20][21] Business Line Data and Key Metrics Changes - Operating earnings for vertically integrated utilities were $0.66 per share, up $0.09 from a year earlier, driven by favorable weather and rate changes [22] - The transmission and distribution utilities segment earned $0.36 per share, up $0.07 from last year, benefiting from rate changes and higher transmission revenue [22] - Generation and marketing produced $0.14 per share, up $0.02 from last year, with favorable retail and wholesale margins [22] Market Data and Key Metrics Changes - AEP's total retail load growth has been favorable, with commercial load growing 12.3% compared to the first quarter of last year [9] - The company expects to see annual retail load growth of between 8% to 9% through 2027, representing a significant increase in demand [27] - The company has over 500 existing and potential customers requesting to connect nearly 80 gigawatts of load to its transmission system [30] Company Strategy and Development Direction - The company is committed to investing $54 billion over the next five years to meet the needs of 5.6 million customers across 11 states [5][8] - AEP is focusing on infrastructure investments to support increasing electric demand, including plans for new generation and transmission projects [10][12] - The company is actively managing regulatory strategies to ensure fair cost allocation and protect existing customers while attracting large loads [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth potential, citing significant economic development activities across its footprint [38] - The company is optimistic about achieving its 2025 commitments and maintaining a strong balance sheet to support capital spending needs [8][38] - Management highlighted the importance of regulatory developments and customer engagement in driving future growth [14][18] Other Important Information - The company has received commission approvals for large load tariffs in several states, indicating strong regulatory support for its growth initiatives [11] - AEP's first quarter earned ROE for rate-related businesses was 9.3%, up from 9.05% at year-end [15] - The company is focused on reducing regulatory lag and has made timely filings to support its financial and operational strategies [17] Q&A Session Summary Question: How are conversations going in West Virginia regarding securitization? - Management reported positive discussions and is optimistic about achieving a favorable outcome in the upcoming hearings [41][43] Question: Are there any pullbacks from hyperscalers like Microsoft? - Management noted that despite Microsoft's delay, there is still robust demand from other customers, and the overall system demand remains strong [45][46] Question: How do you reconcile current sales trends against the 2025 forecast? - Management indicated that while near-term earnings impacts may be muted, the rapid addition of commercial and industrial load creates additional growth opportunities [51][53] Question: What are the implications of shifting from ESPs to MYPs in Ohio? - Management highlighted that the new legislation supports capital investment growth and promotes timely recovery of investments, which is beneficial for the company [55][56] Question: What is the plan for financing the potential $10 billion upside? - Management stated that they have already secured equity needs through previous transactions and have various levers to pull for future financing [100][102]

Financial Performance - AEP reported first-quarter 2025 GAAP earnings of $800 million or $1.50 per share, down from $1,003 million or $1.91 per share in the same quarter of 2024[3][16] - Operating earnings for the first quarter of 2025 were $823 million or $1.54 per share, compared to $670 million or $1.27 per share in the first quarter of 2024, reflecting a 22.8% increase[3][16] - AEP's estimated GAAP earnings per share for 2025 is projected to be between $5.71 and $5.91, with adjustments for various impacts[26][28] - GAAP earnings for Q1 2025 were $800.2 million, translating to an EPS of $1.50, compared to $1.91 in Q1 2024[38] - Adjustments to GAAP earnings in Q1 2025 totaled $23.1 million, resulting in operating earnings of $823.3 million, or $1.54 per share[38] Sales Performance - Total retail electric sales increased by 3.5% year-over-year, reaching 23,934 million kWh in Q1 2025, up from 23,119 million kWh in Q1 2024[42] - Wholesale electric sales surged by 27.3% year-over-year, totaling 4,791 million kWh in Q1 2025, compared to 3,763 million kWh in Q1 2024[42] - Residential retail electric sales increased by 9.9% to 9,404 million kWh in Q1 2025, compared to 8,560 million kWh in Q1 2024[42] - The industrial retail electric sales decreased by 1.8% year-over-year, totaling 8,101 million kWh in Q1 2025, down from 8,252 million kWh in Q1 2024[42] - Total KWHs delivered by transmission and distribution utilities increased by 10.7% year-over-year, reaching 24,194 million kWh in Q1 2025[42] Capital and Investment - The company secured $2.3 billion through an equity offering completed in March 2025 to support its five-year, $54 billion capital growth plan[5][6] - AEP's capital plan includes $34 billion for distribution and transmission investments to support anticipated load growth, with projects totaling $1.7 billion approved by the PJM board[10][11] - The transmission business is expected to contribute 55% of operating earnings in 2025, with over 500 new and existing customers interested in connecting to the transmission system[11] - AEP's direct tariff exposure related to the $54 billion capital plan is minimal at approximately 0.3%[8] Regulatory and Policy Engagement - The company is actively working with regulators to achieve energy policy goals and has filed updated integrated resource plans in Arkansas and Indiana[13][15] - The impact of Ohio legislation contributed an additional $27.7 million to earnings in Q1 2025[38] Segment Performance - The vertically integrated utilities segment reported a GAAP loss of $324.1 million in Q1 2025, down from a profit of $560.8 million in Q1 2024[39] - The corporate segment reported a loss of $25.5 million in Q1 2025, compared to a loss of $54.3 million in Q1 2024[39] Guidance and Outlook - AEP reaffirmed its 2025 operating earnings guidance of $5.75 to $5.95 per share and a long-term growth rate of 6% to 8%[4][25] - Commercial load increased by 12.3% in the first quarter of 2025 compared to the same period in 2024, continuing a trend from the previous year[6][9]

May 6, 2025 AEP First Quarter 2025 Earnings Presentation AEP CONFIDENTIAL Cautionary Note Regarding Forward- Looking Statements This presentation contains forward-looking statements. Words such as "expect," "anticipate," "intend," "plan," "believe," "will," "should," "could," "would," "project," "continue" and similar expressions, and include statements reflecting future results or guidance and statements of outlook are intended to identify forward-looking statements but are not the exclusive means of ident ...

Group 1: Coca-Cola (KO) - Coca-Cola stock is up over 16% in 2025, contrasting with a more than 5% decline in the S&P 500 index, indicating its status as a safe haven during market turbulence [3][6] - The stock offers a near 2.8% dividend yield and is relatively insulated from tariffs due to local production and minimal exposure to packaging material costs [4][6] - Coca-Cola's core beverage is considered a consumer staple, making it less vulnerable to economic downturns [5] Group 2: Waste Management (WM) - WM stock has increased over 13% year-to-date, significantly outperforming the S&P 500 [7] - The company reported a 16.7% increase in revenue and a 12.2% growth in adjusted EBITDA for Q1 2025, largely due to the acquisition of Stericycle for $7.2 billion [8][9] - WM benefits from long-term contracts and a diverse customer base, providing insulation from economic fluctuations and trade tensions [10][11] - The company has consistently increased its dividend, with a 10% raise to $3.30 per share, and has reduced its share count by 11% over the last decade [12][13] Group 3: American Electric Power (AEP) - AEP stock has risen over 17% in 2025, outperforming the S&P 500, which has declined more than 5% [14] - The company operates as a regulated utility, ensuring stable returns and predictable financial planning for capital expenditures, including $54 billion for infrastructure upgrades from 2025 to 2029 [16] - AEP has maintained an average payout ratio of 69% over the past five years, balancing shareholder value growth with necessary upgrades [17] - Currently, AEP is valued at 8.9 times operating cash flow, below its five-year average of 9.3, making it an attractive option for income investors [18]