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AES Corporation (AES) Q4 Earnings: What Awaits the Stock?
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The AES Corporation (AES - Free Report) is set to release fourth-quarter 2016 results, before the opening bell on Feb 27.
Last quarter, the company posted a negative earnings surprise of 3.03%. In fact, AES Corp missed the Zacks Consensus Estimate in three of the trailing four quarters, with an average negative surprise of 9.29%.
Let’s see how things are shaping up prior to this announcement:
Factors at Play
With respect to portfolio optimization, AES Corp has been witnessing significant consolidation of the regulated utility sector at attractive valuations in Brazil. To capitalize on this trend, the company closed the sale of AES Sul, its most material utility business in Brazil, in the fourth quarter. The company estimated to receive net proceeds of $440 million from the sale, during fourth quarter of 2016 and first quarter of 2017.
In terms of its construction projects, the company expects to witness consistent progress and considers these programs to be its most significant growth drivers.
However, in Brazil, despite observing modest improvement in energy demand in recent times, the company expects to witness negative growth during fourth quarter of 2016.
For the fourth quarter, the Zacks Consensus Estimate for earnings projects growth of 5.15%, while the consensus for revenues hints at a decline of 1.18% on a year-over-year basis.
Our proven model does not conclusively show that AES Corp is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: AES Corp has an Earnings ESP of 0.00%. This is because the Most Accurate estimate of 36 cents stands in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AES Corp’s Zacks Rank #3, when combined with an Earnings ESP of 0.00%, makes our surprise prediction difficult for this quarter.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks in the Utility space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:
Pinnacle West Capital Corp. (PNW - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2. The company is scheduled to release fourth-quarter results on Feb 24.
A Peer Release
American Electric Power Co., Inc. (AEP - Free Report) 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).
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
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AES Corporation (AES) Q4 Earnings: What Awaits the Stock?
The AES Corporation (AES - Free Report) is set to release fourth-quarter 2016 results, before the opening bell on Feb 27.
Last quarter, the company posted a negative earnings surprise of 3.03%. In fact, AES Corp missed the Zacks Consensus Estimate in three of the trailing four quarters, with an average negative surprise of 9.29%.
Let’s see how things are shaping up prior to this announcement:
Factors at Play
With respect to portfolio optimization, AES Corp has been witnessing significant consolidation of the regulated utility sector at attractive valuations in Brazil. To capitalize on this trend, the company closed the sale of AES Sul, its most material utility business in Brazil, in the fourth quarter. The company estimated to receive net proceeds of $440 million from the sale, during fourth quarter of 2016 and first quarter of 2017.
In terms of its construction projects, the company expects to witness consistent progress and considers these programs to be its most significant growth drivers.
However, in Brazil, despite observing modest improvement in energy demand in recent times, the company expects to witness negative growth during fourth quarter of 2016.
For the fourth quarter, the Zacks Consensus Estimate for earnings projects growth of 5.15%, while the consensus for revenues hints at a decline of 1.18% on a year-over-year basis.
The AES Corporation Price and EPS Surprise
The AES Corporation Price and EPS Surprise | The AES Corporation Quote
Earnings Whispers
Our proven model does not conclusively show that AES Corp is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: AES Corp has an Earnings ESP of 0.00%. This is because the Most Accurate estimate of 36 cents stands in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AES Corp’s Zacks Rank #3, when combined with an Earnings ESP of 0.00%, makes our surprise prediction difficult for this quarter.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a couple of stocks in the Utility space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:
Spark Energy, Inc. will report fourth-quarter results on Mar 9. The company has an Earnings ESP of +14.43% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pinnacle West Capital Corp. (PNW - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2. The company is scheduled to release fourth-quarter results on Feb 24.
A Peer Release
American Electric Power Co., Inc. (AEP - Free Report) 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).
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>