Interested In The AES Corporation (NYSE:AES)? Here’s How It’s Performing
When The AES Corporation’s (NYSE:AES) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were AES’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not AES actually performed well. Below is a quick commentary on how I see AES has performed. See our latest analysis for AES
Commentary On AES’s Past Performance
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique enables me to assess various companies in a uniform manner using the latest information. For AES, its latest earnings is -$19.0M, which compared to the previous year’s figure, has turned from positive to negative. Since these values may be fairly short-term, I’ve calculated an annualized five-year value for AES’s net income, which stands at $178.7M.
Additionally, we can analyze AES’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -3.19%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the US renewable energy industry has been enduring severe headwinds in the past twelve months, leading to an average earnings drop of -35.62%. This is a substantial change, given that the industry has been delivering a positive rate of 9.21%, on average, over the past couple of years. This means whatever recent headwind the industry is facing, it’s hitting AES harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues AES may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research AES to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for AES’s future growth? Take a look at our free research report of analyst consensus for AES’s outlook.
2. Financial Health: Is AES’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
