AES Q2 Earnings Outpace Estimates, Revenues Decline Y/Y

Core Insights - The AES Corporation reported second-quarter 2025 adjusted earnings of 51 cents per share, exceeding the Zacks Consensus Estimate of 39 cents by 30.8% and improving 34.2% from 38 cents in the same quarter last year [1][9] - The increase in adjusted earnings was attributed to a lower adjusted tax rate and higher contributions from new renewable projects [1] - The company experienced a GAAP loss of 15 cents per share compared to GAAP earnings of 39 cents in the second quarter of 2024 [1] Revenue and Financial Performance - Total revenues for AES amounted to $2.86 billion, reflecting a 3% year-over-year decline due to lower non-regulated revenues, and missing the Zacks Consensus Estimate of $3.28 billion by 13.5% [3][9] - The total cost of sales in Q2 was $2.40 billion, up 0.5% year over year, while operating income fell 18.1% to $453 million from $553 million in the prior year [4] - Interest expenses decreased to $352 million, down 9.5% from $389 million in the same quarter last year [4] New Contracts and Backlog - During Q2 2025, AES secured new long-term power-purchase agreements (PPAs) for 1.6 gigawatts (GW) of solar and wind, increasing its total backlog to 12 GW, with 5.2 GW currently under construction [5][9] Financial Condition - As of June 30, 2025, AES had cash and cash equivalents of $1.35 billion, down from $1.52 billion at the end of 2024 [6] - Non-recourse debt increased to $21.75 billion from $20.63 billion as of December 31, 2024 [6] - Net cash flow from operating activities for the first half of 2025 was $1.52 billion, compared to $0.68 billion in the same period of 2024 [6] Capital Expenditure and Guidance - Total capital expenditure for the first six months of 2025 was $2.59 billion, a decrease from $3.83 billion recorded in the previous year [7] - AES reaffirmed its 2025 earnings guidance, expecting adjusted earnings in the range of $2.10-$2.26 per share, with the Zacks Consensus Estimate at $2.14 [8]