It has been about a month since the last earnings report for AES (AES Quick QuoteAES - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AES due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for The AES Corporation before we dive into how investors and analysts have reacted as of late.

AES’ Q2 Earnings Decline Y/Y, Revenues Outpace Expectations

AES reported second-quarter 2026 earnings of 44 cents per share. The bottom line declined 13.7% from 51 cents in the year-ago quarter.

On a GAAP basis, earnings were 60 cents per share versus a loss of 15 cents a year ago.

AES’ Total Revenues

Revenues climbed 19.9% year over year to $3.42 billion and beat the consensus mark of $3.1 billion by 10.4%, aided by stronger Renewables and Energy Infrastructure sales.

Highlights of AES’ Release

Total cost of sales increased 13.7% year over year to $2.73 billion. 

Operating margin jumped 52.8% to $692 million.

General and administrative expenses rose 26.5% to $62 million, while interest expense increased 4.5% to $368 million. 

Other expense dropped to $27 million from $295 million.

AES' Backlog Supports the Project Pipeline

AES ended the quarter with a 10.9-GW PPA backlog, including 3.8 GW under construction.

AES' PPA backlog consisted of 10.9 GW of projects with signed contracts that were not yet operational. Of this amount, 3,788 MW was under construction, with wind representing 45%, energy storage 29% and solar 26% of that portfolio.

Another 7,137 MW of contracted renewable capacity had not yet entered construction, comprising 64% solar, 22% wind and 14% energy storage. During the first half of 2026, AES completed 2 GW of renewables and 0.5 GW of natural gas capacity and signed or was awarded 901 MW of new long-term PPAs.

AES’ Financial Condition

Cash and cash equivalents were $1.8 billion as of June 30, 2026 compared with $1.38 billion as of Dec. 31, 2025. 

Net cash provided by operating activities for the first six months of 2026 increased 47.7% year over year to $2.25 billion.

Capital expenditures rose 31.8% to $3.41 billion over the same six-month period. 

Total non-recourse debt was $26.02 billion at quarter-end, up from $23.91 billion as of Dec. 31, 2025, while recourse debt totaled $6.10 billion compared with $5.98 billion.

AES' Merger and Financing Milestones Advance

AES entered into a merger agreement on March 1, 2026, under which shareholders would receive $15.00 in cash per share. Stockholders approved the transaction on June 26, 2026, and the waiting period under the Hart-Scott-Rodino Act expired on June 22, 2026. The transaction remains subject to specified regulatory approvals and other closing conditions.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, AES has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AES has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.