American Electric Reins In 2012 EPS Target; Economic Outlook Modest

American Electric Power (AEP) reined in its long-running profit target for 2012 ahead of a meeting with investors, adding economic challenges remain in the states where it operates.

The company, which is one of the largest U.S. electric utilities, said it now expects a per-share profit of $3.05 to $3.25 for 2012. It had been targeting earnings of roughly $3.25 a share since late 2010.

Chief Executive Nicholas K. Akins added the company expects 4% to 6% earnings growth over the next few years, pointing to plans for continued investment in its regulated operations and other goals.

American Electric Power, which has utilities operations from Texas to Ohio, has been anticipating a sluggish economic recovery that could stretch over several years. The company on Friday said the economic outlook in the 11 states where it operates remains modest, with slight growth year-over-year expected in industrial and commercial sectors and flat residential load.

The utility last month reported its fourth-quarter earnings rose 75% on stronger wholesale volume, though retail volume shrank.

Shares were recently up 13 cents to $39.50 in premarket trade. The stock is down 4.7% since the start of the year through the Thursday close.

-By Mia Lamar, Dow Jones Newswires; 212-416-3207; [e-mail]