American Electric Power ( AEP) reported a first-quarter earnings drop of 37%, as the demand for electricity softened, especially among its industrial customers. During the quarter that ended March 31, the company earned $360 million, or 89 cents a share, compared with $573 million or $1.43 during the same period last year. Analysts expected a profit of 81 cents a share. Revenue remained flat at $3.5 billion, as residential sales remain strong. " The positives are not enough to offset the significant negative impacts from declining industrial load and off-system sales margins and volumes," Michael Morris, chairman, president and CEO, said in a statement. "Declining demand across the country, combined with the lowest natural-gas prices in years, is significantly impacting the volume and price we can realize for the excess generation we sell into the marketplace." American Electric has about 5 million customers in 11 states -- many in the Midwest, where manufacturing of cars and steel has slowed considerably from the recession. Last month, the government's Energy Information Administration forecast a nearly 2% decline in electricity consumption this year across the country, and a 6.4% decline in industrial sales. The company reaffirmed its full-year guidance of $2.75 to $3.05 a share.