AEP earnings drop 4%

Staff report

columbus

American Electric Power earnings dropped 4 percent in the first quarter of 2010, because of decreases in commercial and industrial sales.

The electric utility company reported a first- quarter profit of $344 million Thursday, compared with $360 million in the first quarter of 2009.

Higher rates, improved off-system sales and a cold winter led to increased residential demand in the first quarter, the company said in a statement.

Though residential sales continue to improve, economic recovery has been slower than expected, the company said. Commercial demand fell by 1.2 percent, and industrial demand fell by 1 percent.

“For several quarters we’ve been seeing some signs of economic improvement in the states we serve,” Michael Morris, AEP chairman, president and chief executive, said in a statement. “But the signs have yet to be followed by a broad increase in electricity demand that typically accompanies economic improvement.”

AEP will take further steps to reduce costs as a result of slow economic improvement, Morris said.

Morris said cost-cutting measures would include both labor and nonlabor reductions.