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AES Corporation (AES) to Post Q3 Earnings: What's in Store?

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The AES Corporation (AES - Free Report) is slated to report third-quarter 2021 results on Nov 4, before the opening bell.

In the last reported quarter, the company delivered an earnings surprise of 6.90%. AES Corporation has a trailing four-quarter earnings surprise of 1.14%, on average.

Factors to Note

With the U.S. economy gradually recovering over the past couple of quarters, an improvement in industrial and commercial sales might have favorably contributed to the company’s revenues in the quarter to be reported. However, with workers returning to the workplace, residential sales might show signs of weakness. Thus, this might get reflected in the overall sales.

During the third quarter, the company purchased its remaining 49.9% stake in AES Colon, thereby increasing its ownership to 100% for this liquefied natural gas (LNG) plant. Notably, 100% of the output from AES Colon facility is contracted through 2028. This is likely to have benefited the to-be-reported quarter’s performance.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.50 billion, suggesting a decline of 1.9% from the year-ago quarter’s reported figure.

From the cost perspective, the company’s solid cost-saving initiative and reduced interest expenses may have positively impacted the third-quarter performance.

Meanwhile, the company continues to invest in global renewables and U.S. Utilities to fund rate based growth with a continued focus on grid and fleet modernization. Such efforts are likely to have favored the performance in the quarter to be reported.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 43 cents per share, indicating growth of 2.4% from the prior-year reported figure.

The AES Corporation Price and EPS Surprise

The AES Corporation Price and EPS Surprise

The AES Corporation price-eps-surprise | The AES Corporation Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for AES Corporation 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. This is the case here as you will see.

Earnings ESP: The company’s Earnings ESP is +3.53%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AES Corporation currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are three other Utilities players you may want to consider, as these too have the right combination of elements to post an earnings beat this season:

TransAlta Corporation(TAC - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3.

Pacific Gas & Electric Co. (PCG - Free Report) has an Earnings ESP of +1.92% and a Zacks Rank #3.

Edison International (EIX - Free Report) has an Earnings ESP of +1.49% and a Zacks Rank #3.