Core Insights - AES reported $3.35 billion in revenue for Q3 2025, a year-over-year increase of 1.9% [1] - The EPS for the same period was $0.75, compared to $0.71 a year ago, but fell short of the consensus estimate of $0.78 by 3.85% [1] - The revenue exceeded the Zacks Consensus Estimate of $3.29 billion, resulting in a surprise of +1.85% [1] Revenue Breakdown - Renewables SBU generated $817 million, surpassing the estimated $733.43 million, reflecting a year-over-year increase of +12.5% [4] - Energy Infrastructure SBU reported $1.48 billion, below the average estimate of $1.55 billion, indicating a year-over-year decline of -8.6% [4] - Utilities SBU achieved $1.11 billion, exceeding the average estimate of $1.01 billion, with a year-over-year increase of +15% [4] Stock Performance - AES shares have returned -4.6% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - AES reported quarterly earnings of $0.75 per share, missing the Zacks Consensus Estimate of $0.78 per share, but showing an increase from $0.71 per share a year ago, resulting in an earnings surprise of -3.85% [1] - The company posted revenues of $3.35 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.85% and showing a year-over-year increase from $3.29 billion [2] - AES shares have increased by approximately 5.8% since the beginning of the year, underperforming compared to the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.67 on revenues of $3.59 billion, and for the current fiscal year, it is $2.17 on revenues of $12.79 billion [7] - The estimate revisions trend for AES was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Utility - Electric Power industry, to which AES belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Q3 2025 Net Income was $517 million, an increase of 140% compared to $215 million in Q3 2024[4] - Adjusted EBITDA for Q3 2025 was $830 million, up 19.0% from $698 million in Q3 2024[6] - Adjusted EPS for Q3 2025 was $0.75, an increase of 5.6% compared to $0.71 in Q3 2024[7] - Total revenue for Q3 2025 was $3,351 million, a slight increase of 1.9% compared to $3,289 million in Q3 2024[23] - Net income attributable to The AES Corporation increased to $639 million in Q3 2025, compared to $504 million in Q3 2024, reflecting a growth of 26.7%[23] - Basic earnings per share for continuing operations rose to $0.94 in Q3 2025, compared to $0.72 in Q3 2024, an increase of 30.6%[23] - Adjusted EBITDA with Tax Attributes for Q3 2025 was $1,256 million, an increase from $1,174 million in Q3 2024, representing a 7% growth[33] Revenue Breakdown - Non-Regulated revenue decreased to $2,269 million in Q3 2025 from $2,352 million in Q3 2024, representing a decline of 3.5%[23] - Regulated revenue increased to $1,082 million in Q3 2025, up 15.4% from $937 million in Q3 2024[23] - The Renewables Strategic Business Unit (SBU) reported revenue of $817 million in Q3 2025, up 8.4% from $754 million in Q3 2024[25] - The Energy Infrastructure SBU revenue decreased to $1,483 million in Q3 2025 from $1,614 million in Q3 2024, a decline of 8.1%[25] Project Development - The company has a backlog of 11.1 GW of signed Power Purchase Agreements (PPAs), including 5 GW under construction[10] - Year-to-date, the company completed 2.9 GW of new projects and is on track to add a total of 3.2 GW by year-end 2025[4] - The company signed or was awarded new long-term PPAs for 2.2 GW of renewables year-to-date, including 1.6 GW with data centers[4] Guidance and Future Expectations - The company reaffirmed its 2025 guidance for Adjusted EBITDA of $2,650 to $2,850 million, with a growth target of 5% to 7% through 2027[9] - The company expects 2025 Adjusted EBITDA with Tax Attributes to be between $3,950 and $4,350 million[11] - The company is on track with its $1.4 billion capex plan for 2025 at its US utilities[5] Cash Flow and Liquidity - Total cash provided by operating activities for the nine months ended September 30, 2025, was $2,818 million, compared to $1,664 million for the same period in 2024, marking a 69% increase[29] - Cash and cash equivalents rose to $1,758 million as of September 30, 2025, up from $1,524 million at the end of 2024, an increase of 15.3%[27] - Cash, cash equivalents, and restricted cash at the end of Q3 2025 totaled $2,549 million, slightly down from $2,559 million at the end of Q3 2024[29] Liabilities and Assets - Total current liabilities increased to $9,434 million as of September 30, 2025, compared to $8,571 million at the end of 2024, reflecting a rise of 10.1%[27] - The total assets of The AES Corporation increased to $50,783 million as of September 30, 2025, compared to $47,406 million at the end of 2024, marking a growth of 5.0%[27] Subsidiary Distributions and Parent Company - Total subsidiary distributions to Parent for the four quarters ended September 30, 2025, amounted to $2,200 million, a 23.5% increase from $1,633 million in the previous year[42] - For the quarter ended September 30, 2025, subsidiary distributions to Parent were $423 million, a decrease of 40.8% compared to $715 million in the same quarter of the previous year[42] - The Parent Company's liquidity at September 30, 2025, was $1,650 million, down from $2,047 million at December 31, 2024, representing a decline of 19.4%[42] - Returns of capital distributions to Parent for the quarter ended September 30, 2025, were $200 million, a substantial increase from $28 million in the same quarter of the previous year[42] - The company emphasizes that subsidiary distributions are crucial for funding debt service and other cash needs, highlighting the reliance on subsidiary performance[42]

Financial Performance - Third quarter net income increased by $302 million, from $215 million to $517 million, primarily due to higher income tax benefits and margins from new projects in the Renewables SBU [217]. - Adjusted EBITDA rose by $132 million, from $698 million to $830 million, driven by contributions from new projects in the Renewables SBU and increased rider revenues in the Utilities SBU [218]. - For the nine months ended September 30, 2025, net income decreased by $352 million, from $646 million to $294 million, mainly due to lower earnings from the Energy Infrastructure SBU and the sale of AES Brasil [222]. - Total revenue for the third quarter of 2025 was $3,351 million, a 2% increase from $3,289 million in 2024 [237]. - The Utilities SBU revenue increased by 15% in Q3 2025, reaching $1,105 million compared to $961 million in Q3 2024 [237]. - Adjusted EPS for the nine months ended September 30, 2025, decreased by $0.07, from $1.60 to $1.53, primarily due to lower realized tax attributes at the Renewables SBU [226]. - The Renewables SBU operating margin increased by 13% in Q3 2025, reaching $213 million compared to $189 million in Q3 2024 [237]. - Net cash provided by operating activities increased by 32% in Q3 2025, totaling $1,297 million compared to $985 million in Q3 2024 [237]. - Consolidated revenue increased by $62 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by higher transmission and distribution revenues [244]. - Operating margin increased by $13 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, despite a decrease in the Energy Infrastructure segment [246]. - For the nine months ended September 30, 2025, consolidated revenue decreased by $184 million, or 2%, primarily due to lower revenues from the Energy Infrastructure segment [249]. - The operating margin decreased by $265 million, or 14%, for the nine months ended September 30, 2025, compared to the same period in 2024, largely due to lower generation and prior year revenues from the AES Andes portfolio [253]. Expenses and Income - General and administrative expenses decreased by $11 million, or 19%, to $46 million for the three months ended September 30, 2025, reflecting cost reductions from the company's restructuring program [257]. - Interest expense decreased by $31 million, or 8%, to $348 million for the three months ended September 30, 2025, primarily due to the sale of AES Brasil [259]. - Other income decreased by $45 million, or 70%, to $19 million for the three months ended September 30, 2025, mainly due to a decrease in gains on remeasurement of contingent consideration [265]. - The gain on disposal and sale of business interests increased by $27 million, or 63%, to $70 million for the nine months ended September 30, 2025, primarily due to a gain on the selldown of Dominican Republic Renewables [271]. - Asset impairment expense decreased by $43 million, or 58%, to $31 million for the three months ended September 30, 2025, compared to the same period in 2024, due to prior year impairments [273]. - Asset impairment expense decreased by $232 million to a $74 million asset impairment reversal for the nine months ended September 30, 2025, compared to a $158 million expense for the same period in 2024 [274]. - The company recognized net foreign currency transaction losses of $57 million for the nine months ended September 30, 2025, primarily due to unrealized losses from the depreciation of the Argentine peso [277]. - Income tax benefit was $226 million for the three months ended September 30, 2025, compared to an income tax expense of $103 million for the same period in 2024, resulting in effective tax rates of (69)% and 31% respectively [282]. - Net income attributable to The AES Corporation increased by $135 million, or 27%, to $639 million for the three months ended September 30, 2025, compared to $504 million for the same period in 2024 [292]. - Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries decreased by $270 million, or 48%, to $296 million for the nine months ended September 30, 2025, compared to $566 million for the same period in 2024 [291]. - Net equity in losses of affiliates increased by $34 million to $55 million for the nine months ended September 30, 2025, compared to $21 million for the same period in 2024, primarily driven by lower earnings from sPower [287]. - Other non-operating expense was $42 million for the nine months ended September 30, 2025, due to a $32 million impact from Uplight and a $10 million other-than-temporary impairment of convertible notes for 5B [281]. - Net loss from disposal of discontinued businesses was $37 million for the nine months ended September 30, 2025, compared to $7 million for the same period in 2024 [288]. - The company reported lower contributions from renewables projects placed in service in the current year of $155 million, impacting overall net income [293]. - Higher margins from the Renewables SBU increased by $74 million, excluding one-time restructuring costs, primarily due to increased revenue from new projects [293]. Earnings and Adjusted Metrics - For the three months ended September 30, 2025, the company reported a net income of $517 million, compared to $215 million for the same period in 2024, representing a 141% increase [304]. - Adjusted EBITDA for the three months ended September 30, 2025, was $830 million, up from $698 million in 2024, reflecting an increase of 19% [304]. - Adjusted EBITDA with Tax Attributes for the three months ended September 30, 2025, reached $1,256 million, compared to $1,174 million in 2024, indicating a growth of 7% [304]. - The company reported diluted earnings per share (EPS) of $0.94 for the three months ended September 30, 2025, compared to $0.86 for the same period in 2024, marking a 9% increase [318]. - For the nine months ended September 30, 2025, net income was $294 million, a decrease from $646 million in 2024, reflecting a decline of 54% [304]. - Adjusted PTC for the three months ended September 30, 2025, was $475 million, down from $582 million in 2024, representing a decrease of 18% [311]. - The company incurred impairment losses of $61 million for the three months ended September 30, 2025, compared to $37 million in 2024, indicating an increase of 65% [311]. - Interest expense for the three months ended September 30, 2025, was $348 million, slightly down from $379 million in 2024, a decrease of 8% [304]. - The company recognized tax attributes of $426 million for the three months ended September 30, 2025, compared to $476 million in 2024, reflecting a decrease of 10% [304]. - The company’s Adjusted EBITDA for the nine months ended September 30, 2025, was $2,102 million, compared to $1,996 million in 2024, showing an increase of 5% [304]. - For the three months ended September 30, 2025, the company reported a Non-GAAP diluted earnings per share of $0.95, compared to $0.72 for the same period in 2024, representing a 32% increase [319]. - Adjusted EBITDA for the three months ended September 30, 2025 increased by $82 million, reaching $296 million, a 38% increase from $214 million in the same period of 2024 [322]. - Operating Margin for the nine months ended September 30, 2025 increased by $19 million, primarily driven by a $147 million positive impact from new businesses and a $42 million impact from AES Andes moving to Renewables [324]. - Adjusted EBITDA with Tax Attributes for the nine months ended September 30, 2025 increased by $255 million, totaling $1,612 million, compared to $1,357 million in 2024, a 19% increase [326]. - The company realized $421 million from tax attributes earned by its U.S. renewables business during the three months ended September 30, 2025, down from $475 million in the same period of 2024 [323]. - Adjusted PTC for the three months ended September 30, 2025 increased by $25 million to $98 million, a 34% increase compared to the same period in 2024 [330]. - Operating Margin for the three months ended September 30, 2025 increased by $32 million, mainly due to higher transmission and rider revenues [328]. - The company reported a $66 million negative impact from the sale of AES Brasil in 2024, affecting the overall performance in the Renewables SBU [321]. - The company experienced a $150 million negative impact related to the sale of AES Brasil during the nine months ended September 30, 2025 [324]. - The company reported a $47 million increase in Adjusted EBITDA for the nine months ended September 30, 2025, totaling $659 million, compared to $619 million in 2024, a 6% increase [327]. - Adjusted EBITDA for the nine months ended September 30, 2025 increased by $40 million, primarily due to various operational drivers, adjusted for NCI, depreciation, and restructuring costs [332]. - Adjusted EBITDA with Tax Attributes for the nine months ended September 30, 2025 increased by $96 million, driven by a $56 million increase in realized tax attributes related to the Pike County BESS project [332]. - Operating Margin for the nine months ended September 30, 2025 decreased by $344 million, influenced by prior year revenues from the monetization of the Warrior Run coal plant PPA and lower generation due to dispatch [336]. - Adjusted EBITDA for the three months ended September 30, 2025 increased by $11 million, mainly due to increased ownership of Cochrane and equity earnings from Gatun starting commercial operations [335]. - Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $140 million, primarily due to various operational challenges, adjusted for NCI and restructuring costs [337]. - Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $7 million, mainly due to higher net losses at Fluence, partially offset by reduced general and administrative expenses [341]. Regulatory and Market Environment - The U.S. maintains a global safeguard tariff of 14% on solar cells and modules, which is expected to expire in February 2026 [345]. - The U.S. has imposed Section 301 tariffs on certain Chinese-made lithium-ion batteries, currently set at 7.5% and increasing to 25% effective January 1, 2026 [347]. - AES has contracted and imported all necessary solar panels for U.S. solar projects scheduled to become operational in 2025, with most panels manufactured in the U.S. [356]. - AES has contracted all battery needs for U.S. energy storage projects scheduled for completion in 2025, with almost all batteries sourced from U.S. or Korean suppliers [359]. - In 2024, the company realized $1,313 million in earnings from Tax Attributes, with $1,293 million from the Renewables SBU and $20 million from the Utilities SBU [377]. - For the nine months ended September 30, 2025, the company recognized $988 million in Tax Attributes, expecting an increase in earnings from Tax Attributes in 2025 aligned with growth in the U.S. renewables business [377]. - The 2025 Act significantly revised U.S. renewable energy tax credits, allowing wind and solar projects starting construction within 12 months of enactment to qualify for 100% of the credit without a 2027 deadline [370]. - The company anticipates that the majority of its renewables project backlog will continue to qualify for the Investment Tax Credit (ITC) and Production Tax Credit (PTC) despite potential additional burdens from the 2025 Act [374]. - The 2025 Act amended the Global Intangible Low Taxed Income (GILTI) provision, which may subject a portion of the company's foreign earnings to current U.S. taxation starting January 1, 2026 [380]. - The company expects to exit the substantial majority of its coal facilities owned in 2022 by year-end 2025, continuing efforts to reduce carbon intensity through long-term contracted renewables [398]. - The enactment of the 2025 Act requires substantial guidance from the U.S. Department of Treasury, which may materially impact the company's results of operations [378]. Strategic Initiatives and Operations - The company is actively managing a hedging program to mitigate the impact of rising interest rates on future debt refinancings and new projects under development [386]. - The Central Bank of Argentina initiated a new economic program supported by a $20 billion agreement with the International Monetary Fund, with $15 billion available in 2025 [390]. - The company believes the carrying amount of its long-lived assets in Puerto Rico, valued at $920 million, is recoverable as of September 30, 2025 [397]. - AES Ohio's distribution rate case includes an increase in annual distribution revenue requirement of $168 million, based on a capital structure of 53.87% equity and 46.13% long-term debt [407][408]. - AES Indiana's settlement agreement proposes an increase in revenue of $90.7 million, with a return on common equity of 9.75% and a cost of long-term debt of 5.34% on a rate base of approximately $5.5 billion [411]. - As of September 30, 2025, the carrying value of AES Maritza's long-lived assets is $336 million, with potential risks related to the PPA discussions and compliance with EU State Aid rules [405]. - AES Ohio withdrew its Smart Grid Phase 2 Application on May 23, 2025, due to financial uncertainty from new legislation, allowing flexibility in timing and scope of future investments [406]. - The Ohio legislature passed H.B. 15, allowing electric utilities to file three-year forecasted base distribution rate cases, which could materially impact AES Ohio's financial results [409]. - AES Ohio recorded a net deferral of $8.4 million for previously recognized costs related to the recovery of expenditures during Q3 2025 [408]. - AES Indiana expects to receive an order from the IURC during Q2 2026 regarding its rate case filing [411]. - AES Maritza's PPA remains in place, but there is uncertainty regarding its future due to ongoing reviews and potential discussions with DG Comp [404][405]. - Regulatory changes and decarbonization initiatives may require material capital expenditures and impact the estimated useful life of coal facilities [401][402].

Core Viewpoint - AES Corporation operates a significant international energy business, focusing on both renewable and traditional power sources, while emphasizing sustainable operations and energy access across various sectors [1][2]. Financial Performance - AES reported a 3% year-over-year decline in revenue for Q2 2025, totaling $2.86 billion, primarily due to a 7.1% drop in non-regulated revenues [5]. - The adjusted EPS increased from $0.38 in Q2 2024 to $0.51 in Q2 2025, surpassing Wall Street's expectation of $0.39, although the revenue fell short of the anticipated $3.30 billion [5]. - Analysts project a 1.4% year-over-year growth in EPS for fiscal 2025, reaching $2.17, and an 8.8% increase to $2.36 in fiscal 2026 [6]. Stock Performance - Over the past 52 weeks, AES's stock has declined by 15.5%, but has seen a year-to-date increase of 7.8% [3]. - The stock reached a 52-week low of $9.46 in May, but has since risen by 46.6% from that level [3]. - AES's stock has underperformed compared to the S&P 500 Index, which gained 17.7% over the same period, and the Utilities Select Sector SPDR Fund (XLU), which is up by 12.7% [4]. Market Position - AES has a market capitalization of $9.88 billion and continues to supply reliable electricity globally, enhancing energy access in numerous countries [2].

Group 1 - AES is a clean energy giant and a leader in the utility sector, currently trending within a buy zone amid takeover rumors [1] - The company operates power plants, electricity grids, and energy storage facilities, serving approximately 2.6 million customers globally [1] - AES has seen its Relative Strength (RS) Rating climb to 73, indicating improved price performance [3] Group 2 - There are rumors of a potential $38 billion buyout from BlackRock's Global Infrastructure Partners (GIP) [3] - The stock has experienced volatility due to renewable tax cuts and ongoing takeover interest [3] - The energy sector is positively impacting the S&P 500, with notable pledges from companies like Amazon and Google towards nuclear energy [3]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - The AES Corporation is expected to report its third-quarter 2025 results on November 4, following a previous earnings surprise of 30.8% in the last quarter [1]. Factors Impacting AES' Q3 Performance - Strategic investments in infrastructure modernization and grid resilience are anticipated to enhance operational efficiency and reliability, contributing positively to the upcoming quarterly results [2]. - Increased electricity demand from data centers, particularly driven by artificial intelligence workloads, is expected to support AES' earnings [3]. - Warmer-than-normal temperatures during the third quarter likely boosted electricity demand for cooling, positively impacting the company's revenue [4]. Q3 Expectations - The Zacks Consensus Estimate for earnings is set at 74 cents per share, reflecting a year-over-year increase of 4.2% [5]. - The revenue estimate stands at $3.31 billion, indicating a 0.7% growth year over year [5]. Earnings Prediction - The company's Earnings ESP is +1.70%, suggesting a strong likelihood of an earnings beat this quarter [6]. - AES currently holds a Zacks Rank of 3, indicating a hold position [7]. Other Industry Players - Xcel Energy is also expected to report an earnings beat with an Earnings ESP of +0.38% and a Zacks Rank of 3 [8]. - Eversource Energy is projected to have an earnings beat with an Earnings ESP of +5.13% and a Zacks Rank of 3 [10]. - Alliant Energy is likely to report an earnings beat with an Earnings ESP of +0.43% and a Zacks Rank of 3 [11].

Group 1 - The AES Corporation is considered one of the best large-cap stocks to buy under $20, with a price target raised to $24 from $23 by Morgan Stanley, maintaining an Overweight rating [1] - Morgan Stanley highlighted that utilities outperformed the S&P in September and anticipates a focus on the evolution of data center pipelines for utility companies heading into Q3 2025 [2] - The AES Corporation operates as a power generation and utility company both in the US and internationally [3] Group 2 - The firm will be closely monitoring commentary regarding interconnection times as part of its analysis of utility companies [2] - There is a belief that certain AI stocks may offer greater upside potential compared to AES, indicating a competitive landscape in investment opportunities [3]

Core Insights - The AES Corporation has a market cap of $10.2 billion and operates approximately 32,000 megawatts of generation capacity, serving 2.7 million customers globally [1] Financial Performance - The company is expected to report fiscal Q3 2025 results on November 4, with analysts predicting an adjusted EPS of $0.70, a decrease of 1.4% from $0.71 in the same quarter last year [2] - For fiscal 2025, adjusted EPS is projected to be $2.17, reflecting a 1.4% increase from $2.14 in fiscal 2024, and is expected to rise 8.3% year-over-year to $2.35 in fiscal 2026 [3] Stock Performance - AES shares have declined by 16.2% over the past 52 weeks, underperforming the S&P 500 Index's gain of 13.4% and the Utilities Select Sector SPDR Fund's increase of 14.1% during the same period [4] Recent Developments - Following the Q2 2025 report, AES shares rose slightly as adjusted EPS of $0.51 exceeded consensus estimates, marking a 34.2% year-over-year increase due to lower taxes and new renewable projects [5] - The company signed 1.6 GW of new solar and wind power purchase agreements (PPAs), increasing its total backlog to 12 GW, with 5.2 GW currently under construction [5] Guidance and Analyst Ratings - AES reaffirmed its 2025 adjusted EPS guidance of $2.10 - $2.26 and aims for a 7% - 9% annual growth target through 2027 [6] - The consensus rating for AES stock is "Moderate Buy," with 12 analysts providing ratings that include five "Strong Buys," five "Holds," one "Moderate Sell," and one "Strong Sell" [6] - The average analyst price target for AES is $14.77, suggesting a potential upside of 2.6% from current levels [6]