AES Corp. (AES) Misses On Q4 Earnings, Gives '17 Outlook

The AES Corporation’s (NYSE:AES) fourth-quarter 2016 adjusted earnings per share of 35 cents missed the Zacks Consensus Estimate of 36 cents by 2.8%.

Barring the one-time adjustments, the company’s fourth-quarter loss was 30 cents, compared with the year-ago loss of 11 cents.

Full-year earnings came in at 98 cents per share, in line with the Zacks Consensus Estimate.

Highlights of the Release

AES Corp. generated total revenue of $3,544 million in the fourth quarter, up 10.1% year over year. The top line also surpassed the Zacks Consensus Estimate of $3,360 million by 5.5%.

Full-year revenues came in at $13.59 billion, lagging the Zacks Consensus Estimate of $14.11 billion by 3.7%. Reported revenues also fell 4% from the year-ago figure of $14.16 billion.

In the reported quarter, total cost of sales was $2,882 million, up 15.2% year over year. General and administrative expenses were $59 million, higher than the year-ago level of $46 million. Operating income was down 7.7% to $662 million.

Interest expenses in the quarter were $345 million, down from $349 million in the year-ago quarter.

Financial Condition

AES Corp. reported cash and cash equivalents of $1,305 million as of Dec 31, 2016, compared with $1,257 million as of Dec 31, 2015. Non-recourse debt totaled $14,489 million as of Dec 31, 2016, up from $12,943 million as of Dec 31, 2015.

In 2016, cash from operating activities was $2,884 million, compared with $2,134 million a year ago. Total capital expenditure in the period was $2,345 million, higher than $2,308 million a year ago.

Proportional free cash flow, a non-GAAP measure, was $1,417 million in 2016, up from $1,241 million in the year-ago quarter.

Guidance

AES Corp. provided its adjusted earnings per share guidance for 2017 in the range of $1.00−$1.05.

The company expects 2017 consolidated free cash flow guidance in the band of $1,400−$2,000 million.

Business Update

On Feb 24, 2017, AES Corp. and Alberta Investment Management Corporation (AIMCo), have entered into an agreement to purchase FTP Power LLC (sPower) − the largest independent owner, operator and developer of utility scale solar assets in the U.S. − from Fir Tree Partners and its minority owners.

The transaction is valued at $853.0 million in cash, plus the assumption of $724.0 million in non-recourse debt. Per the terms of the agreement, AES Corp. and AIMCo will independently acquire and own a little less than 50% equity interests in sPower.

Zacks Rank

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

Peer Releases

American Electric Power Co., Inc. (NYSE:AEP) reported fourth-quarter 2016 operating earnings of 67 cents per share, beating the Zacks Consensus Estimate of 55 cents by 21.8%. The company has a Zacks Rank #3 (Hold).

NextEra Energy, Inc. (NYSE:NEE) reported fourth-quarter 2016 adjusted earnings of $1.21 per share, missing the Zacks Consensus Estimate of $1.29 by 6.2%. Reported earnings were, however, up 3.4% year over year. The company carries a Zacks Rank #2 (Buy).

WEC Energy Group (NYSE:WEC) reported fourth-quarter 2016 adjusted earnings of 61 cents per share, a penny lower than both the Zacks Consensus Estimate and the year-ago figure of 62 cents. The company carries a Zacks Rank #3.

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