The AES Corporation’s (AES) fourth-quarter 2014 adjusted earnings per share of 41 cents beat the Zacks Consensus Estimate by 10.8%. Reported earnings also surged 41.4% from the year-ago figure of 29 cents per share.
The company’s bottom line surged on account of higher contributions from its U.S., Brazil and Andes Strategic Business Units (“SBUs”).
2014 adjusted earnings of $1.30 per share also surpassed the Zacks Consensus Estimate of $1.27 by 2.4%. Reported earnings were also up 0.8% year over year.
Highlights of the Release
AES Corporation generated total revenue of $4,132 million in the fourth quarter, lagging the estimates by 30.7%. Quarterly revenues were however up 8.7% year over year.
2014 revenues of $17,146 million surpassed the estimates by 0.3%. It also improved 7.9% year over year.
In the reported quarter, total cost of sales was $3,424 million, up 9.4% year over year. General and administrative expenses were $39 million, down 35% year over year.
Interest expenses in the reported quarter were $385 million compared with $417 million in the year-ago quarter.
Financial Condition
AES Corp. reported cash and cash equivalents of $1,539 million as of Dec 31, 2014 compared with $1,642 million as of Dec 31, 2013. Non-recourse debt was $13,618 million as of Dec 31, 2014, up from $13,318 million as of Dec 31, 2013.
Cash from operating activities in 2014 was $1,791 million compared with $2,715 million in 2013. Capital expenditure in 2014 was $2,544 million, down from $2,579 million a year ago.
Free cash flow stood at $1,047 million, down 43.5% year over year. Proportional free cash flow, a non-GAAP measure, was $891 million in2014, down 29.9% year over year.
The company repurchased 22 million shares for $308 million in 2014. It also doubled its quarterly dividend to 10 cents. The company announced a share repurchase authorization of $400 million.
Asset Sale
During 2014, AES Corp. announced and/or closed 10 asset sale transactions for total proceeds of $1.8 billion. Since Sep 2011, AES Corp. has exited 10 countries with total proceeds of $3.0 billion.
Guidance
AES Corp. lowered its adjusted earnings guidance for 2015 to the range of $1.25−$1.35 per share from its earlier projection of $1.30−$1.40 per share.
The company maintained its 2015 proportional free cash flow guidance in the range of $1,000−$1,350 million.
The company has also reaffirmed average annual cash flow growth of 10% to 15% through 2018.
Other Company Releases
Ameren Corp. (AEE) posted fourth-quarter 2014 earnings from continuing operations of 19 cents per share, beating the Zacks Consensus Estimate of 14 cents by 35.7%.
Edison International (EIX) reported solid fourth-quarter 2014 results wherein its adjusted earnings of $1.06 per share came ahead of the Zacks Consensus Estimate of 84 cents by an impressive 26.2%.
PG&E Corp.’s (PCG) adjusted operating earnings per share of 53 cents in the fourth quarter of 2014 missed the Zacks Consensus Estimate of 54 cents.
Our Take
The company’s SBUs in the U.S., Andes, Brazil, Europe, Middle East and Africa (EMEA) and Asia performed well. The company continues to profit from its capital allocation strategy, share repurchases, debt prepayment and focus on cost savings, as evident from its strong bottom-line growth. The company continues to streamline its operations by selling non-core assets.
AES Corp. currently holds a Zacks Rank #4 (Sell).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment