AES Corp (AES) Q3 Earnings Beat Estimates, Revenues Down Y/Y

AES Corporation’s (NYSE:AES) third-quarter 2019 adjusted earnings of 48 cents per share surpassed the Zacks Consensus Estimate of 40 cents by 20%. Moreover, earnings grew 37.1% from the year-ago quarter’s 35 cents per share.

Barring one-time adjustments, the company delivered GAAP earnings of 32 cents per share in the reported quarter compared with 15 cents in the prior-year period.

Highlights of the Release

AES Corp generated total revenues of $2,625 million in the third quarter, down 7.5% year over year. The top line also lagged the Zacks Consensus Estimate of $2,966 million by 11.5%.

Total cost of sales was $1,924 million in the third quarter, down 11.2% year over year. General and administrative expenses were $41 million, 4.7% lower than the year-ago quarter’s $43 million.

Operating income stood at $701 million, up 4.5% from $671 million in the year-ago period.

Interest expenses summed $250 million, down 2% from $255 million in the year-earlier period.

Highlights of the Quarter

AES Corp signed 921 MW of new PPAs during the third quarter of 2019, for a total of 1.9 GW year to date. The company formed a 10-year strategic alliance with Google (NASDAQ:GOOGL) to develop and implement solutions to enable broad adoption of clean energy. It also received approval from the government of Vietnam to develop the 2.2 GW Son My 2 CCGT.

Financial Condition

AES Corp reported cash and cash equivalents of $1,145 million as of Sep 30, 2019, compared with $1,166 million as of Dec 31, 2018.

Non-recourse debt totaled $14,323 million as of Sep 30, 2019, up from $13,986 million as of Dec 31, 2018.

In the third quarter of 2019, cash from operating activities was $761 million compared with the year-ago quarter’s $767 million.

Total capital expenditures during the third quarter amounted to $558 million, which decreased from $598 million incurred in the year-ago quarter.

The AES Corporation Price, Consensus and EPS Surprise

Guidance

For 2019, AES Corp reaffirmed its adjusted EPS guidance of $1.30-$1.38. It also reaffirmed its average annual growth rate target of 7-9% through 2022.

The Zacks Consensus Estimate for earnings is currently pegged at $1.34 per share, which is the mid-point of the company’s guided range.

AES Corp also reaffirmed its 2019 Parent Free Cash Flow expectation of $700-$750 million.

Zacks Rank

AES Corp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

NextEra Energy (NYSE:NEE) reported third-quarter 2019 adjusted earnings of $2.39 per share, beating the Zacks Consensus Estimate of $2.27 by 5.3%. Moreover, earnings rose 10.1% on a year-over-year basis.

Entergy Corporation (NYSE:ETR) reported third-quarter 2019 adjusted earnings of $2.52 per share, which surpassed the Zacks Consensus Estimate of $2.31 by 9.1%. Moreover, the reported figure rose 7.2% from $2.35 per share in the year-ago quarter.

American Electric Power (NYSE:AEP) reported third-quarter 2019 adjusted earnings per share of $1.46, surpassing the Zacks Consensus Estimate of $1.30 by 12.3%. Moreover, the bottom line also increased 15.9% from $1.26 per share in the year-ago quarter.

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