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

A month has gone by since the last earnings report for AES (AES). Shares have lost about 3.6% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is AES due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

AES Q3 Earnings Miss Estimates, Revenues Increase Y/Y

The AES Corporation’s third-quarter 2025 adjusted earnings of 75 cents per share missed the Zacks Consensus Estimate of 78 cents by 3.9%. The bottom line, however, improved 5.6% from 71 cents in the year-ago quarter.

The company reported GAAP earnings of 89 cents per share compared with 91 cents in the third quarter of 2024.

The year-over-year improvement was due to increased revenues and higher operating margins.

AES’ Total Revenues

The company’s total revenues amounted to $3.35 billion, up 1.9% year over year due to higher regulated revenues. The figure also surpassed the Zacks Consensus Estimate of $3.29 billion by 1.9%.

Highlights of AES’ Q3 Release

The total cost of sales in the third quarter was $2.62 billion, up 1.9% year over year.

The operating income totaled $735 million, up 1.8% from $722 million in the year-ago period.

Interest expenses amounted to $348 million, down 8.2% from $379 million in the prior-year quarter.

AES’ Financial Condition

AES had cash and cash equivalents of $1.76 billion as of Sept. 30, 2025, compared with $1.52 billion as of Dec. 31, 2024.

Non-recourse debt totaled $21.66 billion as of the same date, up from $20.63 billion as of Dec. 31, 2024.

The net cash flow from operating activities amounted to $2.82 billion during the first nine months of 2025 compared with $1.66 billion in the first nine months of 2024.

Total capital expenditure was $4.39 billion during the first nine months of 2025, down from $5.67 billion recorded a year ago.

AES’ 2025 Guidance

AES reaffirmed its 2025 earnings guidance. It still expects to generate adjusted earnings in the range of $2.10-$2.26 per share. The Zacks Consensus Estimate is pegged at $2.17, which lies below the midpoint of the company’s guided range.

The company reaffirmed its average annual earnings growth target in the band of 7-9% through 2027.

 

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months.

VGM Scores

Currently, AES has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AES has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

AES belongs to the Zacks Utility - Electric Power industry. Another stock from the same industry, OGE Energy (OGE), has gained 0.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.

OGE Energy reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +8.2%. EPS of $1.14 for the same period compares with $1.09 a year ago.

For the current quarter, OGE Energy is expected to post earnings of $0.30 per share, indicating a change of -41.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +20% over the last 30 days.

OGE Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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