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AES Corp (AES) to Post Q1 Earnings: Is a Beat in Store?
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The AES Corporation (AES - Free Report) is set to release first-quarter 2018 results, before the opening bell on May 8.
In the last reported quarter, the company delivered a positive earnings surprise of 34.38%. Moreover, it surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average earnings surprise being a positive 5.30%.
Let’s see how things are shaping up prior to this announcement.
Our proven model conclusively shows that AES Corp. is likely to beat earnings this quarter. Notably, 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. Impressively, the company has these attributes, as mentioned below:
Zacks ESP: The company has an Earnings ESP of +4.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AES Corp. currently carries a Zacks Rank #3, which along with a positive Earnings ESP indicates at possible earnings beat.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
Lower corporate tax rate arising from the latest U.S. tax reform, along with the favorable impact of deferred tax remeasurement, are expected to benefit AES Corp.’s first-quarter results.
In March 2018, the company completed the sale of its entire equity interest in its Philippines businesses for $1.05 billion in proceeds, which it plans to use to retire its long-term debt due 2024 and 2025 along with some parent debt outstanding. We expect the effect of this debt reduction to get reflected in the company’s first-quarter results, in the form of lower interest expenses, which in turn, is likely to boost its bottom line.
The acquisition of sPower was a key growth driver for the company in 2017. In fact, AES Corp. gained higher equity earnings last year on account of new solar projects at sPower. We expect the upcoming results to reflect similar trends.
For the to-be-reported quarter, the Zacks Consensus Estimate for earnings of 25 cents projects a rise of 47.1% while the same for revenues of $3.45 billion shows a drop of 1.3% on a year-over-year basis.
Ameren Corporation (AEE - Free Report) is expected to report first-quarter earnings on May 9. The company has an Earnings ESP of +1.45% and a Zacks Rank #3.
Duke Energy Corporation (DUK - Free Report) is expected to report first-quarter earnings on May 10. The company has an Earnings ESP of +1.66% and a Zacks Rank #3.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
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AES Corp (AES) to Post Q1 Earnings: Is a Beat in Store?
The AES Corporation (AES - Free Report) is set to release first-quarter 2018 results, before the opening bell on May 8.
In the last reported quarter, the company delivered a positive earnings surprise of 34.38%. Moreover, it surpassed the Zacks Consensus Estimate in two of the trailing four quarters, the average earnings surprise being a positive 5.30%.
Let’s see how things are shaping up prior to this announcement.
The AES Corporation Price and EPS Surprise
The AES Corporation Price and EPS Surprise | The AES Corporation Quote
Why a Likely Positive Surprise
Our proven model conclusively shows that AES Corp. is likely to beat earnings this quarter. Notably, 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. Impressively, the company has these attributes, as mentioned below:
Zacks ESP: The company has an Earnings ESP of +4.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AES Corp. currently carries a Zacks Rank #3, which along with a positive Earnings ESP indicates at possible earnings beat.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors at Play
Lower corporate tax rate arising from the latest U.S. tax reform, along with the favorable impact of deferred tax remeasurement, are expected to benefit AES Corp.’s first-quarter results.
In March 2018, the company completed the sale of its entire equity interest in its Philippines businesses for $1.05 billion in proceeds, which it plans to use to retire its long-term debt due 2024 and 2025 along with some parent debt outstanding. We expect the effect of this debt reduction to get reflected in the company’s first-quarter results, in the form of lower interest expenses, which in turn, is likely to boost its bottom line.
The acquisition of sPower was a key growth driver for the company in 2017. In fact, AES Corp. gained higher equity earnings last year on account of new solar projects at sPower. We expect the upcoming results to reflect similar trends.
For the to-be-reported quarter, the Zacks Consensus Estimate for earnings of 25 cents projects a rise of 47.1% while the same for revenues of $3.45 billion shows a drop of 1.3% on a year-over-year basis.
Other Stocks to Consider
You can also consider stocks from the Zacks Utility Electric-Power industry that are expected to deliver a positive surprise this earnings season.
Hawaiian Electric Industries, Inc. (HE - Free Report) is expected to report first-quarter earnings on May 4. The company has an Earnings ESP of +0.91% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ameren Corporation (AEE - Free Report) is expected to report first-quarter earnings on May 9. The company has an Earnings ESP of +1.45% and a Zacks Rank #3.
Duke Energy Corporation (DUK - Free Report) is expected to report first-quarter earnings on May 10. The company has an Earnings ESP of +1.66% and a Zacks Rank #3.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>