• Third-quarter 2023 GAAP earnings of $1.83 per share; operating earnings of $1.77 per share
• 2023 operating earnings (non-GAAP) guidance range narrowed to $5.24 to $5.34 per share, midpoint maintained at $5.29
• Long-term growth rate of 6% to 7% and FFO/Debt target of 14% to 15% reaffirmed

American Electric Power today reported third-quarter 2023 earnings, prepared in accordance with Generally Accepted Accounting Principles (GAAP), of $954 million or $1.83 per share, compared with GAAP earnings of $684 million or $1.33 per share in third-quarter 2022. Operating earnings for third-quarter 2023 were $924 million or $1.77 per share, compared with operating earnings of $831 million or $1.62 per share in third-quarter 2022.

Operating earnings is a non-GAAP measure representing GAAP earnings excluding special items. The difference between 2023 GAAP and operating earnings for the quarter was largely due to the mark-to-market impact of economic hedging activities.

"Our earnings growth this quarter was driven by our long-term strategy to invest in a modern, reliable energy system to meet the evolving needs of our customers while keeping electricity rates affordable," said Julie Sloat, AEP chair, president and chief executive officer. "Our team has delivered these results in the face of high interest rates, inflation and unfavorable weather by actively managing the business, controlling costs and executing on our flexible and robust capital plan to help meet our stakeholder commitments.

"We are narrowing our operating earnings guidance range to $5.24 to $5.34, maintaining the midpoint of $5.29 and reaffirming our long-term growth rate of 6% to 7% and FFO/Debt target of 14%-15%. On Oct. 24, we announced an increase in our quarterly dividend to 88 cents a share, in line with our earnings growth rate.

"AEP is taking action to de-risk and simplify our business. We completed the sale of our 1,365-megawatt unregulated renewables portfolio in August, netting approximately $1.2 billion. We remain on track with the previously announced sales processes for our retail and distributed resources businesses, our share of a renewable energy joint venture and two non-core transmission joint ventures. We also are continuing our strategic review of the Transource Energy joint venture, which we expect to complete this year," Sloat said.

"We've made significant progress on our five-year, $8.6 billion regulated renewables investment plan, with $6 billion in approved projects and $800 million currently pending commission approval. These projects provide fuel savings for our customers and are aligned with our integrated resource plans. The transmission and distribution investments we're making to enhance service and reliability for customers also continue to support our earnings results.

"Commercial load increased 7.5% year over year, largely driven by our focus on economic development in the communities we serve. We've added nearly 30,000 new residential customers in our service territory this year, which has helped offset lower average usage in the residential segment. We continue to see a softening of industrial load from the impacts of higher interest rates but still expect overall retail load to grow in 2024," Sloat said.

KeyFacts Energy: AEP Renewables US country profile