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AES Corp. (AES) Beats on Q3 Earnings, Lags on Revenues

The AES Corporation 's AES third-quarter 2015 adjusted earnings per share of 39 cents surpassed the Zacks Consensus Estimate of 36 cents by 8.3%. Quarterly earnings increased 14.7% from the year-ago level of 34 cents.

The company's earnings increased primarily on the back of equity earnings from Guacolda in Chile, as well as a 6% reduction in share count and lower Parent interest expense, partially offset by devaluation of foreign currencies.

GAAP earnings were 26 cents in the quarter, down 36.6% from 41 cents in third-quarter 2014 primarily due to a 39-cent gain on the sale of 45% of the company's interest in Masinloc in the Philippines in the third quarter of 2014.

The AES Corporation (AES) - Earnings Surprise | FindTheCompany

Highlights of the Release

AES Corp. generated total revenue of $3,721 million in the third quarter. Quarterly revenues were down 16.2% year over year.

In the reported quarter, total cost of sales was $3,048 million, down 17% year over year. General and administrative expenses were $45 million, unchanged from the year-ago quarter. Operating income was down 12.3% to $673 million.

Interest expenses in the reported quarter were $388 million, down 0.5% from $390 million in the year-ago quarter.

Financial Condition

AES Corp. reported cash and cash equivalents of $1,437 million as of Sep 30, 2015, compared with $1,539 million as of Dec 31, 2014. Non-recourse debt was $13,291 million as of Sep 30, 2015, down from $13,618 million as of Dec 31, 2014.

In the first nine months of 2015, cash from operating activities was $1,505 million compared with $1,216 million a year ago. Total capital expenditure in the period was $1,687 million, up from $1,389 million a year ago.

Proportional free cash flow, a non-GAAP measure, was $1,292 million in the first nine months of 2015, up from $965 million in the year-ago period.

Year-to-date, the company has repurchased 34 million shares for $423 million. It has a new authorization for $400 million available for share repurchase.

Guidance

AES Corp. lowered its adjusted earnings per share guidance for 2015 to the range of $1.18−$1.25 from the previous guidance of $1.25−$1.35. The guidance assumes an expected impact of 4 cents due to bringing forward foreign currency and commodity curves from Jun 30, 2015 to Sep 30, 2015; 7 cents due to lower demand and higher interest rates in Brazil; and 2 cents due to outages at DPL and AES Hawaii.

The company continues to expect 2015 proportional free cash flow in the range of $1,000−$1,350 million, and operating cash flow in the range of $1,900-$2,700 million.

Zacks Rank

Currently, AES Corp. carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the utility space include Korea Electric Power Corp. KEP , sporting a Zacks Rank #1 (Strong Buy), and Ameren Corp. AEE and CMS Energy Corp. CMS , both holding a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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