Why Is AES (AES) Down 3.6% Since Last Earnings Report?

Core Viewpoint - AES Corporation's third-quarter 2025 earnings report showed a mixed performance, with adjusted earnings missing estimates but revenues increasing year-over-year, raising questions about future performance trends [2][3]. Financial Performance - Adjusted earnings for Q3 2025 were 75 cents per share, missing the Zacks Consensus Estimate of 78 cents by 3.9%, but improved 5.6% from 71 cents in the same quarter last year [2]. - Total revenues reached $3.35 billion, up 1.9% year-over-year, exceeding the Zacks Consensus Estimate of $3.29 billion by 1.9% [3]. - The total cost of sales was $2.62 billion, also up 1.9% year-over-year, while operating income increased to $735 million, a rise of 1.8% from $722 million in the previous year [4]. Financial Condition - As of September 30, 2025, AES had cash and cash equivalents of $1.76 billion, an increase from $1.52 billion as of December 31, 2024 [5]. - Non-recourse debt rose to $21.66 billion from $20.63 billion over the same period [5]. - Net cash flow from operating activities for the first nine months of 2025 was $2.82 billion, compared to $1.66 billion in the same period of 2024 [5]. Capital Expenditure - Total capital expenditure for the first nine months of 2025 was $4.39 billion, down from $5.67 billion recorded in the previous year [6]. Guidance and Estimates - 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 $2.17, below the midpoint of the company's guidance [7]. - The company maintains an average annual earnings growth target of 7-9% through 2027 [7]. - Estimates have been revised downward over the past two months [8]. Stock Performance and Outlook - AES has a VGM Score of B, with an average Growth Score of C, a Momentum Score of D, and a Value Score of A, indicating strong value potential [9]. - The stock holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return in the coming months [10]. Industry Comparison - AES operates within the Zacks Utility - Electric Power industry, where OGE Energy reported revenues of $1.05 billion for the last quarter, reflecting a year-over-year increase of 8.2% [11]. - OGE Energy's EPS for the same period was $1.14, compared to $1.09 a year ago, and is expected to post earnings of $0.30 per share for the current quarter, indicating a change of -41.2% from the previous year [12].