Send me real-time posts from this site at my email

AES Gears Up to Report Q1 Earnings: What's in the Cards?

The AES Corporation AES is scheduled to release first-quarter 2021 results on May 6, before the opening bell. In the last reported quarter, this utility delivered an earnings surprise of 6.67%.

The company’s earnings surpassed the Zacks Consensus Estimate on two occasions and missed on the other two, with the average surprise being 0.92%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

During the first quarter, majority of AES Corp.’s service territories witnessed mixed weather pattern. At the onset of the January-March quarter, its service regions experienced colder- than-normal temperature, while above-average temperature was witnessed in the latter part. This is likely to have had a neutral impact on AES Corp.'s first-quarter top line.

The AES Corporation Price and EPS Surprise

The AES Corporation price-eps-surprise | The AES Corporation Quote

 

The company’s joint venture with Siemens, Fluence, had registered a massive 400% annual growth in revenues in 2020. With this joint venture having signed 785 megawatts of new capacity in 2020, we expect a similar revenue contribution from Fluence to have boosted first-quarter revenues as well.

At the end of 2020, the company had project backlog worth 6.9 gigawatts (GW), of which it expects to bring almost 4 GW gigawatts online in 2021. A portion of this target is likely to have come online in the first quarter and that must have boosted the company’s first-quarter revenues.

In line with these expectations, the Zacks Consensus Estimate for first-quarter revenues is pegged at $2.41 billion, which indicates a 3.2% rise from the year-ago quarter’s reported figure.

On the bottom-line front, factors like cost-saving initiatives, interest expense savings, resulting from $7 billion of refinancing across the portfolio and lower adjusted tax rate are expected to have benefited AES Corp.’s quarterly earnings.

Also, higher contributions from the Southland repowering project, which came online in mid-2020, is projected to have boosted AES Corp.’s earnings in the soon-to-be-reported quarter.

Currently, the Zacks Consensus Estimate for first-quarter earnings is pegged at 31 cents, indicating an improvement of 6.9% from the year-ago quarter’s reported figure.

However, lower demand trend due to the COVID-19 impacts and unfavorable hydrological condition in Colombia might have had an adverse impact on the company’s first-quarter results.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for AES Corp. this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company’s Earnings ESP is -3.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AES Corp. carries a Zacks Rank #4 (Sell), currently.

Stocks to Consider

Here are some players from the Utilities sector with the right combination of elements to post an earnings beat in the to-be-reported quarter.

Consolidated Edison ED has an Earnings ESP of +0.06% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

UGI Corp UGI has an Earnings ESP of +1.74% and a Zacks Rank #3.

Duke Energy DUK has an Earnings ESP of +0.16% and a Zacks Rank #3.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Consolidated Edison Inc (ED): Free Stock Analysis Report
 
The AES Corporation (AES): Free Stock Analysis Report
 
Duke Energy Corporation (DUK): Free Stock Analysis Report
 
UGI Corporation (UGI): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue