Akins Appears on CNBC’s ‘Mad Money’ With Jim Cramer

AEP CEO Nick Akins discusses AEP’s third quarter financial results on CNBC’s “Mad Money with Jim Cramer” program.

Nick Akins, AEP chairman, president and chief executive officer, appeared on CNBC’s “Mad Money with Jim Cramer” program October 31 and discussed AEP’s strong financial performance in the third quarter of 2018, a “tempering” of the economy in the company’s service territory, the plight of coal in the country and more with the show’s host, stock analyst Jim Cramer.

View the video.

Concerning AEP’s third quarter results, Akins said, “We did have a great third quarter. The weather obviously drove a lot of it, but the 8.1 percent dividend increase was very good for our investors and it really showed the confidence our board has in our business plan going forward. We’re seeing a 5-to-7 percent growth rate for the foreseeable future and we expect dividends to be commensurate with that growth. We have a solid financial plan, a solid company focused on capital deployment, particularly in transmission, and in other areas, and it shows that our business plan going forward is very positive.”

Cramer noted that AEP’s industrial, commercial and residential sectors had all been improving over the last several quarters, but that was not the case in the third quarter.

“We have seen some tempering of the economy, particularly when it’s non oil and gas related,” Akins explained. “Oil and gas is still doing fine, industrials grew by 2.4 percent but we saw residential and commercial growth come down a little bit. We think it’s really driven by a strong dollar, and some of the tariffs are having an impact on non-oil-and-gas-related activities. We’re seeing some level of tempering, so we’re watching that very closely as we go forward.”

Cramer then asked if President Trump called him and told him to use more coal, would Akins be able to explain to him that it’s a very complex issue?

“Yeah, I think I would,” Akins answered. “It’s much more complex than that and we’re trying to do things to develop those coal-related territories like our Appalachian Sky initiative that focuses on industrial activities. We’re trying to get industrials to locate in those particular areas to provide options going forward, but coal-fired generation continues to fall in this country. Exports of coal, particularly metallurgical coal, continue to have an impact and we want to see that continue to progress, but I think it’s going to be tempered in its approach relative to coal-fired generation, so we have to really think about what that means to the economies in those regions of the country.”

Turning to natural gas and renewables, Akins told Cramer that, “I think you are seeing a much broader view of resources going forward. Certainly renewables are coming into play, and natural gas is being looked at as a backup source for renewables. We view transmission as a resource to bring renewables to market and to be able to optimize the entire grid from a resource perspective. We’re also seeing energy efficiencies and “smart” analytics in place relative to the system that enables us to not build that next central station generation facility. You can expect that to continue into the future.”

Cramer also noted that while other companies have made big bets on large generation projects, AEP for the most part has avoided those types of investments.

“We have thousands of smaller projects and we can have more control over these types of projects and adjust to what we’re seeing financially,” Akins said. “It really gives us an opportunity to focus on the ins and outs of those kinds of projects that accumulate to steady earnings and dividend quality for our shareholders.”