American Electric Power Co., Inc. Q3 2009 Earnings Call Transcript

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2009-10-29 11:32:08.0

Tags: Call Transcript, American Electric Power Co. Inc., Earnings, Year-to-date, Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from Paul Patterson with Glenrock Associates. Please go ahead.

Paul Patterson - Glenrock Associates

Just to summarize, weather versus normal, what was the impact on that again, that you said year-to-date?

Brian Tierney

It was $0.07 for the quarter. The year-to-date is $0.05.

Paul Patterson - Glenrock Associates

Versus normal?

Brian Tierney

Yes.

Paul Patterson - Glenrock Associates

Then with respect to the industrial sales and just the economy, I mean you mentioned I guess you're seeing a bit of improvement in the third quarter. What's your sense, I guess, when you're speaking to your customers and what have you as to what the outlook is, for the next year or so? Can you give us any flavor for that, versus what you guys saw last quarter?

You know is this sort of an inventory replenishment situation, or is this something more long lasting? What are you’re senses for that? And you could you just also [disclose] out the impact of ratcheting, in terms of the fact that revenues sometimes lag these sales decreases because of the way the rate design is sort of set up with some of these industrial customers?

Michael Morris

Yes, a couple of issues there, Paul. Obviously, we've spent a lot of time with some of our larger customers. The metal [meltors] and some others are worried that they really were reacting to the cash-for-clunkers and they weren't seeing an order book that kept them comfortable that they would have a very robust 2010. But they, in fact, are convinced that there is a growing need in the world market place for their products.

So, we're beginning to see some comfort in that. When you talk to folks like Whirlpool and others, they clearly are building inventory. They believe that sales numbers have actually held relatively strong for white goods, which is a bit surprising, but most of it was inventory liquidation. Now they're building facilities to satisfy not only the inventory, but they're seeing a bit of light at the end of that tunnel as well.

So, it's so hard to forecast what 2010 industrial load will look like. But we do expect it will be better than what we experienced throughout 2009. And as you know, that's not only important for us retail-wise, that's important for our off-system sales, as we continue to see a bit stronger gas pricing as well as demand throughout the entire eastern half of the United States. We’ll add some pull on our off-system sales in a positive direction.

 

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