The AES Corporation AES is scheduled to report first-quarter 2016 results before the opening bell on May 9. Last quarter, the company had posted a positive earnings surprise of 3.03%. The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters, with an average negative surprise of 3.85%.Let’s see how things are shaping up for this announcement.Factors to ConsiderOn the fourth-quarter 2015 earnings call, AES Corporation had lowered its 2016-2018 adjusted EPS expectations to reflect a major impact from macroeconomic factors, comprising devaluation in foreign currencies, changes in commodity prices and lower demand and higher interest rates in Brazil.Moreover, AES Corp. runs its generation facilities and integrated utility operations in the U.S. under the U.S. Strategic Business Unit or SBU segment. In 2015, its bottom line was affected primarily by an overall negative contribution from the company's SBUs and devaluation in foreign currencies. The company expects 2016 earnings to suffer from poor hydrology and demand in Brazil. Dry hydrology is leading to high electricity prices by requiring the dispatch of more expensive thermal energy. As a result, AES expects a 5% year-over-year decline in volume at its Brazilian utilities in 2016, which is not expected to witness a rebound before 2018.On top of it, the company’s service territories witnessed warmer-than-normal winter temperatures. This led to lower household expenditure on heating, which is expected to unfavorably impact revenues in the first quarter.However, the company has successfully maintained a flexible liquidity position. Despite being affected by macroeconomic headwinds, the company delivered strong free cash flow in the fourth quarter of 2015. It expects average annual growth in proportional and parent free cash flow of at least 10%.Importantly, in 2016, it expects to generate approximately $1.3 billion of proportional free cash flow, which translates into 90 cents per share. AES Corporation also expects to generate about $675 million in parent free cash flow in 2016, up from the 2015 guidance.What Our Model IndicatesOur proven model does not conclusively show that AES Corporation is likely to beat estimates 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. But that is not the case here, as you will see below.Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +5.26%. This is because the Most Accurate estimate stands at 20 cents, while the Zacks Consensus Estimate is pegged lower at 19 cents.Zacks Rank: AES Corporation currently has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement. Stocks to ConsiderHere is a stock in the electric utility space you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this season:Pattern Energy Group Inc. PEGI has an Earnings ESP of +233.33% and a Zacks Rank #3. It will report quarterly results on May 9.Peer ReleasesEdison International EIX reported first-quarter 2016 results, wherein adjusted earnings of 82 cents per share came in below of the Zacks Consensus Estimate of 89 cents by 7.9%. The quarterly number also declined 8.9% from 90 cents a year ago due to weak performance at Southern California Edison (“SCE”).American Electric Power Co., Inc. AEP reported first-quarter 2016 operating earnings of $1.02 per share, missing the Zacks Consensus Estimate of $1.06 by 3.8%. Earnings also dropped 20.3% from the year-ago figure owing to an unseasonably warm winter that led to weak residential sales and low power prices.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 >>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 AMER ELEC PWR (AEP): Free Stock Analysis Report EDISON INTL (EIX): Free Stock Analysis Report AES CORP (AES): Free Stock Analysis Report PATTERN ENERGY (PEGI): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research