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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].

Core Insights - Public Service Enterprise Group Incorporated (PSEG) reported strong third-quarter 2025 earnings, with adjusted earnings per share (EPS) of $1.13, surpassing estimates by 11.9% and showing a year-over-year increase of 25.6% [3] - Total revenues reached $3.23 billion, exceeding the consensus estimate by 18.2% and reflecting a 22.1% increase from the previous year [4] - The company has revised its 2025 adjusted earnings guidance to a range of $4.00-$4.06 per share, slightly narrowing from the previous range [11] Financial Performance - PSEG's operating income was $855 million, a 33.4% increase from the prior year, while total operating expenses rose by 18.5% to $2.37 billion [7] - The long-term debt as of September 30, 2025, was $22.54 billion, up from $21.11 billion at the end of 2024 [9] - Net cash flow from operating activities for the first nine months of 2025 was $2.58 billion, compared to $1.77 billion in the same period of 2024 [10] Sales Volume - Electric sales volume decreased by 1% year-over-year to 11,804 million kilowatt-hours, with residential sales down 2% and commercial and industrial sales down 1% [5] - Gas sales volume saw a 7% decline to 404 million therms, although total gas sales experienced a 4% increase in firm sales volume [6] Segment Performance - The PSE&G segment reported a net income of $515 million, up from $379 million in the same quarter of the previous year [8] - The PSEG Power & Other segment's adjusted operating income was $107 million, down from $141 million year-over-year [8] Market Outlook - Estimates for PSEG have been trending upward since the earnings release, indicating positive investor sentiment [12] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [14] - In comparison, Edison International, a peer in the electric power industry, reported a year-over-year revenue increase of 10.6% and has a Zacks Rank of 2 (Buy) [15][16]