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AES Corp (AES) to Post Q3 Earnings: What's in the Cards?

Zacks Equity Research

The AES Corporation AES is scheduled to release third-quarter 2019 results on Nov 6, before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 3.7%.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Consider

During the third quarter, majority of AES Corp’s service territories witnessed warmer-than-expected weather. This might have increased electricity demand for cooling, which, in turn, is expected to have made an impact on the company’s third-quarter revenues.

In line with this, the Zacks Consensus Estimate for third-quarter revenues is pegged at $2.97 billion, which indicates 4.6% increase from the year-ago quarter’s reported figure.

Earlier in 2019, the company announced its target of additional annual cost savings worth $100 million, driven by digital initiatives, which is projected to be achieved by 2022. The initiative is expected to have enabled AES Corp to achieve partial cost savings in the third quarter. This factor is likely to have had a positive impact on third-quarter bottom line.

Moreover, the company has been witnessing lower operating expenses over the last few quarters. Due to Fed rate cut and lesser burden of long-term debt, AES Corp has been witnessing lower interest expenses in the last couple of quarters. The trend is likely to have continued in the to-be-reported quarter, which might have favorably impacted the bottom line.

Considering the aforementioned factors, the Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at 40 cents, which indicates a rise of 14.3% from the year-ago quarter’s reported figure.

Earnings Whisper

Our proven model predicts an earnings beat for AES Corp this earnings season. 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.

Earnings ESP: The company’s Earnings ESP is +1.47%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

The AES Corporation Price and EPS Surprise

 

The AES Corporation Price and EPS Surprise

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

 

Other Stocks to Consider

Here some companies that you may consider from the same industry as these also have the right combination of elements to post an earnings beat in the to-be-reported quarter.

PPL Corporation PPL is scheduled to release third-quarter 2019 results on Nov 5. It has an Earnings ESP of +1.37% and a Zacks Rank of 3.

Eversource Energy ES is lined up to release third-quarter 2019 results on Nov 6. It has an Earnings ESP of +1.06% and a Zacks Rank of 2.

CenterPoint Energy CNP is set to release third-quarter 2019 results on Nov 7. It has an Earnings ESP of +0.12% and has a Zacks Rank #3.

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