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AES Corp. (AES) to Report Q3 Earnings: What's in the Cards?

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The AES Corporation (AES - Free Report) is scheduled to release third-quarter 2020 results on Nov 6, before the opening bell. In the last reported quarter, this utility delivered an earnings surprise of 8.70%.

The company’s earnings surpassed the Zacks Consensus Estimate on three occasions and missed on the other one, with the average surprise being 6.35%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

During the third quarter, AES Corp.’s service territories witnessed above-average warm temperatures. This is likely to have resulted in higher electricity demand, leading to increased household expenditure on cooling, which is likely to have boosted AES Corp.'s top line in the third quarter.

Moreover, the company projects its joint venture with Siemens, Fluence, to register solid 400% annual growth in revenues in 2020. We may expect AES Corp.’s third-quarter results to have partially benefited from this revenue growth.

Further, the company’s strategic investment in Uplight, which provides end-to-end, customer-centric, utility-related technology solutions, has been boosting AES Corp’s top line, a trend we expect to have continued in the soon-to-be-reported quarter as well.

However, the impact of the COVID-19 pandemic on overall energy demand across the United States might have offset the aforementioned positives to a certain extent. Notably, the Zacks Consensus Estimate for third-quarter revenues is pegged at $2,649 million, which indicates a 0.9% rise from the year-ago quarter’s reported figure.

Earlier during the year, management anticipated a drastic demand drop in the company’s key markets to drag down its 2020 earnings by 7 cents, primarily due to the COVID -19 impacts. Consequently, we expect AES Corp.’s third-quarter bottom line to have partially been affected by the demand drop.

Currently, the Zacks Consensus Estimate for third-quarter earnings is pegged at 43 cents, indicating a decline of 10.4% from the year-ago quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AES Corp. this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are some players from the Utilities sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

SJW Group (SJW - Free Report) is set to release third-quarter earnings on Nov 5. It has an Earnings ESP of +2.15% and a Zacks Rank #3, currently.

BCE, Inc. (BCE - Free Report) is set to release third-quarter earnings on Nov 5. It has an Earnings ESP of +7.27% and a Zacks Rank #3, currently.

The AES Corporation Price and EPS Surprise

A Recent Utility Release

American Electric Power (AEP - Free Report) reported third-quarter 2020 adjusted earnings per share of $1.47, which beat the Zacks Consensus Estimate of $1.46 by 0.7%.

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