The AES Corporation
) reported fourth quarter 2013 adjusted earnings per share of 29
cents, beating the Zacks Consensus Estimate by 7.4%. However,
operating earnings for the reported quarter lagged the year-ago
figure of 31 cents by 6.4%.
The year-over-year decline was primarily due to poor hydrology in
Panama and a one-time expense related to potential customer
refunds at Eletropaulo.
Including one-time charges of 52 cents in the reported quarter,
GAAP loss was 23 cents compared with earnings of 29 cents in
fourth quarter 2012.
2013 operating earnings were $1.29 per share, surpassing the
Zacks Consensus Estimate by a penny and the year-ago earnings of
$1.21 per share by 6.6%. Operating earnings were on the higher
end of the guidance range of $1.24 to $1.32 per share provided
The results were driven by a lower effective tax rate and general
& administrative expenses. In addition, management???s
prudent capital decision benefited the bottom line.
AES Corporation generated total revenue of $3.8 billion in the
fourth quarter, down 11.7% year over year. The top line also
missed the Zacks Consensus Estimate of $5.57 billion by 30.7%.
2013 total revenue was $15.9 billion, 14.4% lower than the Zacks
Consensus Estimate of $18.6 billion and also down from $17.2
billion in the prior year by 7.4%.
The softer performance of the regulated as well as the
competitive energy services segment impacted results.
Highlights of the Release
In the reported quarter, the company registered a marginal gain
in sales from the U.S. and Europe, Middle East and Africa (EMEA)
region, which was quite insufficient to make up for lower sales
in other geographical areas.
In the reported quarter, total cost of sales was $3.1 billion,
down 10.3% year over year. General and administrative expenses
were $60.0 million, down 11.8% year over year.
Interest expenses in the reported quarter were $0.4 billion, up
15.5% year over year, leading to higher debt levels.
AES Corporation enhanced its generation capability by 522
megawatts (MW) which will definitely enable the company to meet
increasing demand in its service territories.
AES Corp. reported cash and cash equivalents of $1.64 billion as
of Dec 31, 2013 versus $1.9 billion as of Dec 31, 2012.
Non-recourse debt was $13.3 billion versus $12.3 billion as of
Dec 31, 2012.
Cash from operating activities in 2013 was $2.7 billion versus
$2.9 billion in 2012. Capital expenditures in 2013 were $1.98
billion versus $2.1 billion a year ago. Free cash flow in the
financial year was $0.72 billion compared with $0.79 billion in
AES Corp. provided adjusted earnings guidance for 2014 in the
range of $1.30 to $1.38 per share. Cash flow from operating
activities for 2014 is projected between $2.2 billion and $2.8
Free cash flow is estimated in the range of $1.35 billion to
$1.95 billion in 2014.
The company expects 4% to 6% earnings growth in 2015 from 2014
levels. The year-over-year improvement is expected to be driven
by positive contributions from completed construction projects,
including Mong Duong in Vietnam and IPP4 in Jordan.
In 2016, AES Corporation expects earnings to remain in line with
2015 levels. However, the company expects earnings to increase by
6% to 8% annually in 2017 and 2018. AES Corporation expects
impending projects in Chile and India to boost earnings.
Other Company Releases
Dominion Resources, Inc.
) reported fourth-quarter 2013 operating earnings of 80 cents per
share, missing the Zacks Consensus Estimate by 9.1%.
Duke Energy Corp
) reported adjusted fourth quarter 2013 earnings of $1.00 per
share that came in ahead of the Zacks Consensus Estimate of 94
cents by 6.4%.
) announced fourth-quarter 2013 operating earnings of 75 cents
per share, beating the Zacks Consensus Estimate of 68 cents by
AES Corporation was able to keep the earnings surprise streak
alive taking the tally to straight three quarters. We appreciate
the strategic move of the company to increase its international
generation capability. The company is presently constructing
1,851 MW of projects in Chile and India.
The investor friendly moves of share repurchases and dividend
hikes could attract growth and income seeking investors.
The earnings growth projection of AES Corp. is tied to the
completion of development projects on time and schedule. Although
we do not doubt the ability of the company to finish projects on
time, any potential delay could force the company to modify its
long-term growth targets.
AES Corp. currently retains a Zacks Rank #3 (Hold).
AES CORP (AES): Free Stock Analysis Report
DOMINION RES VA (D): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
FIRSTENERGY CP (FE): Free Stock Analysis
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