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AES (AES) Down 0.1% Since Last Earnings Report: Can It Rebound?

·3 min read

A month has gone by since the last earnings report for AES (AES). Shares have lost about 0.1% in that time frame, underperforming 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 Q4 Earnings Beat Estimates While Revenues Fall Short

AES Corporation’s fourth-quarter 2020 adjusted earnings of 48 cents per share surpassed the Zacks Consensus Estimate of 45 cents by 6.7%. Moreover, the bottom line improved 37.1% from the year-ago quarter’s 35 cents per share.

Barring a one-time adjustment, the company posted GAAP earnings of 47 cents per share in the reported quarter against the GAAP loss of 12 cents in the prior-year period.

Highlights of the Release

AES Corp. generated total revenues of $2,560 million in the fourth quarter, up 5.3% year over year. The top line, however, lagged the Zacks Consensus Estimate of $2,841 million by 9.9%.

Total cost of sales was $1,654 million in the fourth quarter, down 11.6% year over year. General and administrative expenses were $46 million, down 23.3% from the year-ago quarter’s figure.

Interest expenses were $297 million, up 13.4% from $262 million in the year-earlier period.

In 2020, the company signed PPAs worth 3-Gigawatt (GW), thus bringing the total renewable backlog to 6.9 GW.

Financial Condition

AES Corp. reported cash and cash equivalents of $1,089 million as of Dec 31, 2020 compared with $1,029 million as of Dec 31, 2019.

Non-recourse debt totaled $15,005 million as of Dec 31, 2020, up from $14,914 million as of Dec 31, 2019.

In the fourth quarter of 2020, net cash provided by operating activities was $668 million compared with the year-ago quarter’s $691 million.

Total capital expenditures during the fourth quarter amounted to $525 million, which declined from $777 million incurred in the year-ago quarter.

Guidance

For 2021, AES Corp. initiated its EPS guidance of $1.50-$1.58. The Zacks Consensus Estimate for the current-year earnings is pegged at $1.57, which is near the upper end of the guided range.

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. The consensus estimate has shifted 9.29% due to these changes.

VGM Scores

Currently, AES has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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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