Akins Discusses Earnings Report on ‘Mad Money’ with Cramer
|AEP CEO Nick Akins appeared on CNBC’s “Mad Money with Jim Cramer” program Jan. 26.|
Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC’s “Mad Money with Jim Cramer” program Jan. 26 and discussed fourth quarter and year-end earnings results and the company’s growth strategy for the future.
In reviewing AEP’s financial results for the quarter and 2016, Cramer remarked that the company is an “incredible dividend-paying machine,” and asked Akins if he thought the dividend could go even higher in the future.
“I really believe that’s the case,” Akins answered, “because we restated earnings, we talked about a growth rate that transitioned the company from a 4-to-6 percent growth rate to 5-to-7 percent growth rate, and we’ve always said — with our Board’s support — that we move the dividend commensurate with our earnings growth.”
Akins also reported that AEP finally saw a glimmer of hope on the load-growth front. For the first time in more than a year, the company saw positive retail sales growth in the fourth quarter of 2016.
“Over the year, it’s (load growth) been really flat, but in the fourth quarter, we started to see improvement from an oil and gas perspective in our service territory, from an an automobile manufacturing standpoint, and from a construction and health care perspective,” Akins said. “This is the first quarter in over a year that we’ve seen growth in all the sectors.”
During his campaign and early on in his first term as president, Donald Trump has said repeatedly that he is going to bring manufacturing and coal mining jobs — as well as the use of coal — back in America. Cramer wondered if current and potential Environmental Protection Agency regulations might be relaxed or repealed, which could benefit AEP.
“That may be a little bit optimistic,” Akins said. “I think when you really look at what’s going on, there’s a transformation occurring in our industry and it’s moving toward a cleaner-energy environment. When President Trump talks about clean coal, there really needs to be a focus on the ability to remove carbon as much as possible from coal (burning) itself. Also, with natural gas becoming prevalent, that balanced energy portfolio should be a true benefit — not only in mitigation of costs to our consumers — but also to reinforce the ability of coal to remain a part of the portfolio. That’s the key point because I think most coal units today are fully controlled from a sulfur dioxide, nitrogen oxide and mercury standpoint, so, obviously, the more emphasis placed on removing carbon from coal (burning) will help make it one of those resources of the future.”