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AES Corp (AES) to Report Q4 Earnings: What's in the Cards?

Zacks Equity Research

The AES Corporation AES is scheduled to release fourth-quarter and full-year 2019 results on Feb 28, before the opening bell.

In the last reported quarter, this utility delivered a positive surprise of 20%.

Moreover, the company’s earnings surpassed the Zacks Consensus Estimate on two occasions for as many misses over the trailing four quarters, the average positive surprise being 4.68%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

During the fourth quarter, majority of AES Corp’s service territories witnessed warmer-than-expected weather, with the month of October being the warmest. Such extreme weather conditions are likely to have pushed up electricity demand for cooling, in turn, boosting its quarterly revenues.

Notably, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2,775 million, which indicates a 5.8% increase from the year-ago quarter’s reported figure.

AES Corp is expected to have witnessed a higher tax rate during the December-end quarter compared with the year-ago quarter’s tax rate. In addition, the power outage at the company’s water-run facility in the United States might have escalated its operations and maintenance cost during the period in discussion. Such factors are likely to have dragged down the company’s quarterly bottom-line growth.

Currently, the Zacks Consensus Estimate for the fourth-quarter earnings is pegged at 33 cents, reflecting a year-over-year decline of 8.3%.

Earlier in April 2019, AES Corp entered into an agreement to sell its interests in six Jordan-based power plants. Further developments took place when the company, during the third-quarter earnings call, announced
its expectation of closing the transactions by the year end. Considering this divestment to have duly taken place, we expect the upcoming results to reflect sale proceeds from this deal.

The AES Corporation Price and EPS Surprise

The AES Corporation Price and EPS Surprise

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

Earnings Whispers

Our proven model predicts an earnings beat for AES Corp this time around. 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 +3.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Recent Utility Releases

CMS Energy CMS reported fourth-quarter 2019 adjusted earnings per share (EPS) of 68 cents, substantially up 70% from the year-ago quarter reported figure of 40 cents. The bottom line, however, missed the Zacks Consensus Estimate of 69 cents.

NextEra Energy NEE delivered adjusted earnings of $1.44 per share for the December-end quarter, lagging the Zacks Consensus Estimate of $1.54 by 6.5%.

Dominion Energy D posted operating earnings of $1.18 per share for the final quarter of 2019, beating the Zacks Consensus Estimate of $1.16 by 1.7%.

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