AES Q3 Earnings Surpass Estimates, Revenues Fall Year Over Year
The AES Corporation’s AES third-quarter 2023 adjusted earnings of 60 cents per share beat the Zacks Consensus Estimate of 55 cents by 9.1%. The bottom line, however, declined 4.8% from 63 cents reported in the year-ago quarter.
The company generated GAAP earnings of 32 cents per share compared with 59 cents in the third quarter of 2022. The decline can be attributed to higher long-lived asset impairments in 2023 and lower earnings at the Energy Infrastructure SBU, mainly due to unrealized foreign currency losses and favorable LNG transactions in 2022.
Total Revenues
Total revenues were $3,434 million in the reported quarter, down 5.3% year over year due to lower regulated as well as non-regulated revenues. The top line also missed the Zacks Consensus Estimate of $3,546 million by 3.2%.
The AES Corporation Price, Consensus and EPS Surprise
The AES Corporation price-consensus-eps-surprise-chart | The AES Corporation Quote
Highlights of the Release
The total cost of sales was $2,516 million in the reported quarter, down 8 % year over year.
The operating income totaled $918 million, up 2.9% from $563 million in the year-ago period.
Interest expenses amounted to $326 million, up 18.1% from $276 million in the prior-year quarter.
The company's backlog for renewable energy projects was 13.2 GW as of Sep 30, 2023, including 5.8 GW under construction.
Financial Condition
AES had cash and cash equivalents of $1,765 million as of Sep 30, 2023, compared with $1,374 million as of Dec 31, 2022.
Non-recourse debt totaled $18,767 million as of Sep 30, 2023, up from $17,846 million as of Dec 31, 2022.
In the first nine months of 2023, AES generated cash from operating activities worth $2,309 million compared with the year-ago figure of $1,649 million.
Total capital expenditure for the third quarter was $1,899 million, up substantially from $1,052 million recorded in the year-ago quarter.
Guidance
AES updated its 2023 earnings guidance. It now expects adjusted earnings per share (EPS) to be in the top half of its prior guided range of $1.65-$1.75. The Zacks Consensus Estimate for the same is pegged at $1.70.
AES reiterated its average annual growth target of 7-9% through 2025.
Zacks Rank
AES currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Utility Releases
NextEra Energy, Inc. NEE released third-quarter 2023 adjusted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 86 cents by 9.3%. The bottom line was also up 10.6% from the prior-year quarter’s level. The year-over-year improvement was due to solid performances by Florida Power & Light Company and NextEra Energy Resources.
For the third quarter, NextEra’s operating revenues totaled $7,172 million, which lagged the Zacks Consensus Estimate of $7,453 million by 3.8%. The top line, however, improved 6.7% year over year.
PG&E Corporation’s PCG adjusted earnings per share of 24 cents in the third quarter lagged the Zacks Consensus Estimate of 28 cents by 14.3%. The bottom line also decreased 17.2% from the year-ago quarter’s reported figure.
PCG recorded total revenues of $5,888 million compared with $5,394 million in the year-ago period. The figure missed the Zacks Consensus Estimate of $5,946.1 million by 0.9%.
Public Service Enterprise Group Incorporated PEG, or PSEG, reported third-quarter 2023 adjusted operating earnings of 85 cents per share, which beat the Zacks Consensus Estimate of 75 cents by 13.3%. However, the figure deteriorated 1.2% year over year.
Operating revenues totaled $2,456 million in the third quarter, which beat the Zacks Consensus Estimate of $2,423.5 million by 1.3%. The top line also increased 8.1% from the year-ago quarter’s figure of $2,076 million.
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