AES (AES) Down 7.1% Since Last Earnings Report: Can It Rebound?

·4 min read

It has been about a month since the last earnings report for AES (AES). Shares have lost about 7.1% 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 the most recent earnings report in order to get a better handle on the important catalysts.

AES Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

AES fourth-quarter 2022 adjusted earnings of 49 cents per share beat the Zacks Consensus Estimate of 46 cents by 6.5%. Earnings also improved 8.9% from the 45 cents reported in the year-ago quarter.

The company generated a GAAP loss of $1.27 per share compared with the 89 cents incurred in the fourth quarter of 2021.

For the full-year 2022, AES reported adjusted earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate of $1.65 by 1.2%. Moreover, adjusted earnings increased 9.9% year over year.

Total Revenues

Total revenues came in at $3,060 million in the reported quarter, which improved 10.5% year over year due to higher regulated and non-regulated revenues. Revenues also beat the Zacks Consensus Estimate of $2,882.1 million by 6.2%.

For the full-year 2022, total revenues came in at $12.62 billion, surpassing the Zacks Consensus Estimate of $12.44 billion. Moreover, net sales increased 1.4% year over year.

Highlights of the Release

The total cost of sales was $2,497 million in the fourth quarter, up 12.9% year over year.

The operating income came in at $563 million, up 0.7% from $559 million in the year-ago period.

Interest expenses totaled $304 million, up 25.6% from $242 million in the year-earlier period.

AES Corp. signed 5.2 GW of power purchase agreements for new renewable energy projects in 2022 as of Dec 31, 2022, bringing the company's backlog to 12.2 GW.

Financial Condition

AES Corp. had cash and cash equivalents of $1,374 million as of Dec 31, 2022 compared with $943 million on Dec 31, 2021.

Non-recourse debt totaled $17,846 million as of Dec 31, 2022, up from $13,603 million as of Dec 31, 2021.

In the fourth quarter, AES generated cash from operating activities worth $1,066 million compared with the year-ago figure of $523 million.

The total capital expenditure for the fourth quarter amounted to $1,840 million, which increased substantially from the $582 million incurred in the year-ago quarter.


For 2023, AES initiated earnings guidance and expects adjusted earnings per share (EPS) to be at or near the high end of the prior guidance range of $1.65-$1.75. The Zacks Consensus Estimate for earnings for 2023 is pegged at $1.75, which is higher than the midpoint of the company’s guided range.

The company reaffirmed the 7-9% average annual growth target through 2025.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

At this time, 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 B on the value side, putting it in the second quintile for this investment strategy.

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


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

Performance of an Industry Player

AES is part of the Zacks Utility - Electric Power industry. Over the past month, OGE Energy (OGE), a stock from the same industry, has gained 1.3%. The company reported its results for the quarter ended December 2022 more than a month ago.

OGE Energy reported revenues of $711.9 million in the last reported quarter, representing a year-over-year change of +22.5%. EPS of $0.25 for the same period compares with $0.27 a year ago.

OGE Energy is expected to post earnings of $0.24 per share for the current quarter, representing a year-over-year change of -82.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for OGE Energy. Also, the stock has a VGM Score of C.

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