COLUMBUS, Ohio (AP) — American Electric Power's net income fell 48 percent in the third quarter as customers' conservation efforts and a slow economy reduced demand for electricity.
AEP earned $487 million, or $1 per share, on revenue of $4.16 billion. Last year the company earned $928 million, or $1.92 per share, but those results were inflated by a court ruling in Texas that reimbursed the company for costs incurred in prior years.
When special items are excluded from results, the company earned $1.02 per share, down 13 percent from last year.
Analysts had expected the company to earn $1.03 per share on revenue of $4.56 billion, according to FactSet.
AEP's shares fell 35 cents, or 0.8 percent, to $44.27 in morning trading.
Electric power demand in the U.S. and in AEP's service territory has been falling because of a slow economy and conservation programs that have helped residents weatherize their homes and adopt more efficient appliances.
When adjusted to remove the effects of weather, which gives investors a picture of underlying demand, AEP electricity sales fell 1.4 percent in the quarter.
AEP CEO Nicholas Atkins said in a statement that despite some bright spots, "The recovery is tenuous, and overall load growth in the regions where we operate is expected to remain essentially flat."
AEP, based in Columbus, Ohio, delivers electricity to 5.3 million customers in 11 states and operates the nation's biggest electric transmission network. It also operates power plants that generate electricity and sell it on wholesale markets.
The company got some help from mother nature, but not as much as last year. This summer was hotter than normal but not quite as steamy as last year, which reduced demand for electricity to run air conditioners. The company said weather reduced earnings by 4 cents per share.
Restoration costs from the "derecho" storm in late June that cut power to 1.4 million AEP customers also hurt results, though regulators may allow the company to recover some of those costs in the future.
The company also suffered as customers in Ohio, the company's most important state, switched to other electric providers.
The company is in the process of restructuring the relationship between its wholesale power operations and retail electric delivery operations in Ohio. The company declined to offer guidance on future earnings until the regulatory proceedings with the Public Utilities Commission of Ohio are resolved.
Akins said the company is in the midst of a broad study of the company's costs, and he will brief investors on the results of the study early next year.