The AES Corporation
) second quarter 2014 adjusted earnings per share of 28 cents were
in line with the Zacks Consensus Estimate. Operating earnings for
the reported quarter were down from the year-ago figure of 35 cents
The Aes Corporation - Earnings Surprise |
The year-over-year decline was primarily due to a higher
effective tax rate in the reported quarter which had a negative
impact of 11 cents. This was marginally offset by an improved
performance in the United States, Andes, Brazil and Mexico, Central
America and Caribbean (MCAC) and accretion from a lower share
Highlights of the Release
AES Corporation generated total revenues of $4.31 billion in the
second quarter, up 9.3% year over year. The top line also surpassed
the Zacks Consensus Estimate of $4.14 billion by 4.1%.
In the reported quarter, total cost of sales was $3.49 billion, up
14.7% year over year. General and administrative expenses were
$52.0 million, down 1.9% year over year.
Interest expenses in the reported quarter were $323 million, down
4.1% year over year.
AES Corp. reported cash and cash equivalents of $1.51 billion as of
Jun 30, 2014 versus $1.64 billion as of Dec 31, 2013. Non-recourse
debt was $13.8 billion as of Jun 30, 2014 versus $13.3 billion as
of Dec 31, 2013.
Cash from operating activities in second quarter 2014 was $0.23
billion versus $0.57 billion in second quarter 2013. Capital
expenditures in the quarter were $0.5 billion versus $0.46 billion
a year ago.
AES Corp. reiterated its adjusted earnings guidance for 2014 in the
range of $1.30 to $1.38 per share. The company however expects 2014
earnings to be on the lower end of the guidance range primarily due
to the continuation of dry hydrological conditions in Latin
Cash flow from operating activities for 2014 is projected between
$2.2 billion and $2.8 billion. Free cash flow is estimated in the
range of $1.35 billion to $1.95 billion in 2014.
Other Company Releases
American Electric Power Company Inc.
) reported second quarter 2014 operating earnings of 80 cents per
share, beating the Zacks Consensus Estimate of 75 cents by 6.7%.
) second quarter 2014 operational earnings came in at $1.11 per
share in the quarter, lagging the Zacks Consensus Estimate of $1.14
CMS Energy Corporation
) posted second quarter 2014 earnings per share of 30 cents,
beating the Zacks Consensus Estimate of 26 cents by 15.4%.
Despite a substantially higher tax rate, AES Corporation's earnings
were in line with our estimates as its Strategic Business Units in
United States, Andes, Brazil and Mexico, Central America and
Caribbean performed better year over year.
The company continues to streamline its operations by selling its
non-core assets. AES Corp. is also repurchasing its shares and
prepaying recourse debt. In addition, keeping stringent
regulations in mind, AES Corp is working towards making its
generation portfolio environment friendly. At present, 2,400
megawatts of environmental upgrades are under construction and on
track to come online through 2018.
The higher tax rate which adversely impacted results is expected to
come down in the second half of the year, but the poor hydrological
conditions are expected to persist in Panama and Brazil. This is
going to have a negative impact on earnings in the range of 7-10
cents per share in 2014.
AES Corp. currently holds a Zacks Rank #3 (Hold).
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