Will AES Corp (AES) Disappoint Investors In Q4 Earnings?

The AES Corporation (NYSE:AES) is set to release fourth-quarter 2017 results, before the opening bell on Feb 27.

Last quarter, the company posted a negative earnings surprise of 17.24%. Moreover, it failed to surpass the Zacks Consensus Estimate in the trailing four quarters, the average earnings miss being 3.99%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

On Oct 2, 2017, AES Corp. transferred 100% of its shares in Shulbinsk HPP and Ust-Kamenogorsk HPP to the Republic of Kazakhstan in accordance with the termination of the concession agreement. As a result, the company anticipates a loss on disposal of at least $37 million in the fourth quarter of 2017.

In December 2017, AES Corp. had hiked its quarterly common stock dividend by 3%. This indicates improved cash inflow from operating activities which we believe will duly get reflected in the upcoming quarterly results.

For the soon-to-be-reported quarter, the Zacks Consensus Estimate for earnings of 32 cents per share projects a decline of 8.6%, while the same for revenues of $3.67 billion shows a rise of 3.6% on a year-over-year basis.

Earnings Whisper

Our proven model does not conclusively show an earnings beat for AES Corp. this quarter. Notably, 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. However, AES Corp lacks these attributes, as mentioned below:

Zacks ESP: The company has an Earnings ESP of +8.25%. 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 #5 (Strong Sell). Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are a few utility stocks which have the right combination of elements to post an earnings beat this quarter:

Public Service Enterprise Group (NYSE:PEG) will report fourth-quarter results on Feb 23. The company has an Earnings ESP of +1.92% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pinnacle West Capital (NYSE:PNW) is slated to report fourth-quarter results on Feb 23. The company has an Earnings ESP of +12.20% and a Zacks Rank #3.

Recent Peer Release

Duke Energy (NYSE:DUK) reported fourth-quarter 2017 adjusted earnings of 94 cents per share, beating the Zacks Consensus Estimate of 91 cents by 3.3%.

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