AES Corp Misses Earnings - Analyst Blog
May 09 2013 - 8:10AM
Zacks
The AES
Corporation (AES) reported first quarter 2013 adjusted
earnings per share of 26 cents, below the Zacks Consensus Estimate
of 28 cents. Adjusted earnings for the reported quarter also
decreased 29.7% from the year-ago figure of 37 cents.
On a GAAP basis, the company reported earnings of 14 cents compared
with 44 cents in the year-ago quarter. The 12-cent variance between
adjusted and GAAP earnings came from a 1 cent and 4 cents charge
related to unrealized derivative and debt retirement losses,
respectively. It also included a 5 cents loss from impairments and
a 2 cents loss from foreign currency transaction.
The company realized lower numbers across all its business units
barring the U.S.
Revenue
In the reported quarter, revenues were $4,265.0 million, failing to
match our projection of $5,197.0 million by 17.9% and also declined
almost 7.0% from the year-ago quarterly revenues of $4,586.0
million.
Lower revenue recognition across all its segments, except MCAC
(Mexico, Central America and the Caribbean), led to the lower
numbers.
Operating Highlights
In the reported quarter, total cost of sales was $3,510.0 million
compared with $3,514.0 million in the first quarter 2012. This
marginal decrease was mainly due to a 7.9% cut in regulated sales
costs.
General and administrative expenses declined to $61.0 million from
$87.0 million in the year-ago quarter level.
Operating income stood at $299.0 million, down 61% from $769.0
million in the same period last year. Although the company managed
to control its costs, a lower top line led to a fall in profit in
the reported quarter.
Interest expense was $377.0 million versus $416.0 million in the
first quarter 2012.
Financial Condition
AES Corporation reported cash and cash equivalents of $2,301.0
million as of Mar 31, 2013 versus $1,966.0 million as of Dec 31,
2012.
The company generated $618.0 million in cash from operating
activities at the end of the first quarter compared with $534.0
million in the year-ago period.
Long-term liabilities as of Mar 31, 2013 decreased to $25.6 billion
from $25.9 billion as of Dec 31, 2012.
Outlook
AES Corporation reaffirmed its adjusted earnings guidance for 2013
in the range of $1.24 to $1.32 per share. The company maintained
its 2012-2015 total return target in the band of 6% to 8%.
Proportionate free cash flow is estimated in the range of $750.0
million to $1,050.0 million in 2013. Cash flow from operating
activities for 2013 is projected to be between $2,500.0 million and
$3,100.0 million.
Other Utility Company Releases
Mich.-based CMS Energy Corporation (CMS) announced
first-quarter 2013 earnings per share of 53 cents on both adjusted
and GAAP basis, beating the Zacks Consensus Estimate of 46 cents.
Earnings were also 43.2% higher than 37 cents earned in the
year-ago quarter. A colder-than-normal weather spiked natural gas
deliveries, driving better-than-expected results in the reported
quarter.
American Electric Power Company Inc.’s (AEP) first
quarter 2013 adjusted earnings of 80 cents per share came in line
with the Zacks Consensus Estimate as well as the year-ago profit.
The company witnessed solid residential and commercial sales during
the quarter, stemming from positive regulated rate recovery.
However, this was partly offset by weak industrial sales.
ALLETE Inc. (ALE) reported first quarter 2013
earnings of 83 cents per share compared with 66 cents per share in
the year-ago quarter. ALLETE’s earnings beat the Zacks Consensus
Estimate by 10.6%. Earnings received a boost from increased
electric sales due to a cold winter, start-up of renewable services
and higher returns from investments in American Transmission
Company.
Zacks Rank
AES Corporation currently retains a Zacks Rank #3 (Hold). American
Electric and ALLETE carry a Zacks Rank #2 (Buy), while CMS Energy
carries a Zacks Rank #1 (Strong Buy) and are worth buying now.
AMER ELEC PWR (AEP): Free Stock Analysis Report
AES CORP (AES): Free Stock Analysis Report
ALLETE INC (ALE): Free Stock Analysis Report
CMS ENERGY (CMS): Free Stock Analysis Report
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