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Will AES Corp. (AES) Q1 Earnings Disappoint Expectations? - Analyst Blog

The AES Corp.AES is slated to report first-quarter 2015 results before the opening bell on May 11, 2015. In the last quarter, the company delivered a positive earnings surprise of 10.8%. Let's see how things are shaping up for this announcement.

Factors at Play

The company is witnessing continuing poor hydro conditions in Brazil, especially in the state of São Paulo, especially where their hydros are located. The company has recently acquired Main Street Power and has strengthened its position in the renewable power business in the U.S., the Caribbean and Latin America.

In spite of that the company may suffer due to volatile foreign exchange rates and unfriendly global macroeconomic conditions from its international ventures.

Earnings Whispers?

Our proven model does not conclusively show that AES Corp. will beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP : That is because the Most Accurate estimate stands at 22 cents while the Zacks Consensus Estimate is pegged at 28 cents. This translates into an Earnings ESP of -21.4%.

Zacks Rank #3 : Though AES Corp.'s Zacks Rank #3 increases the predictive power, its negative ESP makes an earnings beat unlikely this season.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Peer Releases

DTE Energy Company DTE reported adjusted first-quarter 2015 earnings of $1.65 per share, surpassing the Zacks Consensus Estimate of $1.49 by 10.7%

Public Service Enterprise Group Inc. PEG reported adjusted operating earnings per share of $1.04 in the first quarter of 2015, surpassing the Zacks Consensus Estimate by 6.1%.

Edison International EIX reported solid first-quarter 2015 results with adjusted earnings of 89 cents per share coming in ahead of the Zacks Consensus Estimate of 78 cents by 14.1%.

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EDISON INTL (EIX): Free Stock Analysis Report

AES CORP (AES): Free Stock Analysis Report

DTE ENERGY CO (DTE): Free Stock Analysis Report

PUBLIC SV ENTRP (PEG): Free Stock Analysis Report

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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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