The AES Corp.
) reported second quarter 2013 adjusted earnings per share of 32
cents, above the Zacks Consensus Estimate of 26 cents. Adjusted
earnings for the reported quarter also increased approximately
78% from the year-ago figure of 18 cents.
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The results were driven by a lower effective tax rate, the
addition of new capacity and higher availability in Chile, cost
reductions and a lower share count. However, these positives were
partially offset by the unfavorable impact of dry hydrological
conditions in Latin America.
On a GAAP basis, the company reported earnings of 22 cents
compared with 9 cents in the year-ago quarter. The 10-cent
variance between adjusted and GAAP earnings came from a 2 cent
loss on unrealized foreign currency transactions, a 17 cent loss
on extinguishment of debt, unrealized derivative gains of 6 cents
and gains on acquisitions and dispositions of 3 cents per share.
In the reported quarter, revenues were $4,068.0 million, missing
the Zacks Consensus Estimate of $4,296 million. It also declined
0.5% year over year.
The results reflect higher year-over-year sales in Andes, Brazil,
Mexico, Central America and the Caribbean (MCAC) and Europe,
Middle East and Africa (EMEA), partially offset by lower
year-over-year sales in U.S. and Asia.
In the reported quarter, total cost of sales was $3,150 million,
down 7.2% year over year.
General and administrative expenses declined to $59.0 million,
down 20.3% year over year.
During the quarter, the company sold its wind turbine inventory.
It also sold its 10% interest in the 720 MW gas-fired plants in
The company is on track to complete the 2,191 MW of capacity
under construction, which is expected to come on-line through
In Jul 2013, AES Gener entered into a partnership agreement with
Antofagasta Minerals for a 40% stake in the Alto Maipo 531 MW
hydroelectric generation development project in Chile.
AES Corp. reported cash and cash equivalents of $1,611 million as
of Jun 30, 2013 versus $1,966.0 million as of Dec 31, 2012.
Consolidated operating cash flow was $567 million versus $580
million in the year-ago period. Capital expenditures during the
quarter were $570 million versus $498 million a year ago.
During the second quarter 2013, the company repurchased 1.6
million shares for a total investment of $18 million. Post
quarter, the company repurchased an additional 3.7 million shares
for a total investment of $45 million.
AES Corp. reaffirmed its adjusted earnings guidance for 2013 in
the range of $1.24 to $1.32 per share. Proportionate free cash
flow is estimated in the range of $750.0 million to $1,050.0
million in 2013. Cash flow from operating activities for 2013 is
projected to be between $2,500.0 million and $3,100.0 million.
The company is on track to achieve $145 million in cumulative
annual cost reductions in 2014.
At the Peers
Integrys Energy Group, Inc.
) reported second quarter 2013 pro forma earnings of 45 cents per
share, up 66.7% from the year-ago quarter. Earnings also breezed
past the Zacks Consensus Estimate of 32 cents by 40.6%.
) posted net operating earnings of 23 cents per share in the
second quarter of 2013, a penny or 4.2% lower than the Zacks
Consensus Estimate. Earnings were however 4.5% higher than the
The company succeeded in beating the Zacks Consensus Estimate.
The company is progressing well with its operational performance,
share repurchases and power generation.
However, the company's long-term supply contracts expose the
company to commodity price risk. Moreover, being a non-dividend
paying stock, it is less attractive for investors. AES Corp.
currently retains a Zacks Rank #4 (Sell).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #2 (Buy) peer