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AES (AES) Down 0.9% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for AES (AES - Free Report) . Shares have lost about 0.9% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is AES due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AES Corp Q3 Earnings Beat Estimates, Revenues Miss

AES Corporation’s third-quarter 2018 adjusted earnings per share of 35 cents surpassed the Zacks Consensus Estimate of 29 cents by 20.7%. Moreover, the bottom line soared 52.2% from the year-ago period’s figure.

Barring one-time adjustments, the company delivered GAAP earnings of 15 cents in the reported quarter compared with 22 cents in the prior-year period.

Highlights of the Release

AES Corp generated total revenues of $2,837 million in the third quarter, up 5.3% year over year. However, the top line lagged the Zacks Consensus Estimate of $3,559 million by 20.3%.

Total cost of sales was $2,166 million in the third quarter, up 5.5% year over year. General and administrative expenses were $43 million, 17.3% lower than the year-ago quarter’s level of $52 million.

Operating income grew 4.8% year over year to $671 million.

Interest expenses in the quarter under review were $255 million, lower than $297 million in the year-earlier period.

Financial Condition

AES Corp reported cash and cash equivalents of $1,187 million as of Sep 30, 2018 compared with $949 million as of Dec 31, 2017.

Non-recourse debt totaled $14,273 million as of Sep 30, 2018, up from $13,176 million as of Dec 31, 2017.

In the third quarter, cash from operating activities was $767 million compared with the year-ago period’s $739 million.

Total capital expenditure in the third quarter was $598 million, which came in above $464 million that the company incurred a year ago.

Guidance

For 2018, AES Corp reaffirmed its adjusted earnings per share outlook in the range of $1.15-$1.25.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months. The consensus estimate has shifted -6.41% due to these changes.

VGM Scores

Currently, AES has a nice Growth Score of B, 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 quintile 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.




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