American Electric Power beats third-quarter estimates and raises 2026 earnings outlook

American Electric Power reported third-quarter earnings of $2.23 per share, $0.16 above expectations. Revenue was $6.83 billion, against $6.61 billion expected.

The company now expects 2026 earnings at or above the top of its earlier range of $6.25 to $6.55 per share. It also set targets of $6.75 to $7.05 per share for 2027 and $7.40 to $7.70 per share for 2028.

The company has expanded its five-year capital plan to $100 billion through 2031. It targets growth in rate base of more than 13 per cent a year. Rate base is the value of the assets on which a utility is allowed to earn a return. It also set a target of 9 to 11 per cent annual growth in operating earnings from 2027 through 2031, and compound annual growth of more than 10 per cent through 2031.

The company now expects up to $21 billion in fixed cost offsets for residential customers from large-load contracts, up from $16 billion before. Bill Fehrman, the chairman, president and chief executive, said the company intends new large-load customers to pay the added system costs they create, and to fund the investment needed to serve them.

On October 5, a Kentucky Power transmission deal with TeraWulf had already pointed to a multi-year buildout for large-load customers, rather than a single contract. The higher offset addresses the leverage and letter-of-credit risk that the financing structure of that deal implied. A letter of credit is a bank guarantee that backs a payment. Raising the offset shifts added system costs onto the data center tenants themselves. The larger capital plan and the longer guidance suggest management now sees data center demand as durable enough to plan years of rate base growth around it.