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AES maintaining FY'16 earnings guidance despite drop in Q1 adjusted EPS


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AES maintaining FY'16 earnings guidance despite drop in Q1 adjusted EPS

AES Corp.'sfirst-quarter adjusted EPS dropped year over year, as expected. The result, 13 cents per share, compared to 25cents per share for the corresponding quarter of 2015 and was below the S&PGlobal Market Intelligence normalized EPS consensus estimate of 20 cents.

AES' first-quarter adjusted pretax contribution was down $80million year over year to $172 million, results released May 9 showed.

AES had warned April 27 that its first-quarter results wouldbe impacted by a higher adjusted effective tax rate, primarily as a result of theenactment of income tax reforms in Chile. As a result, first-quarter adjusted EPSwas impacted by 4 cents, reflecting an adjusted effective tax rate of 50% versus33% in 2015.

First-quarter adjusted EPS was also impacted by the devaluationof foreign currencies in Latin America and Europe, which cost the company 4 cents.

AES is maintainingits full-year 2016 adjusted EPS guidance at 95 cents to $1.05 however based on expectationthat its annual adjusted effective tax rate will remain at between 31% and 33%.Full-year proportional free cash flow guidance is maintained at between $1.0 billionand $1.35 billion and so is consolidated net cash from operating activities at between$2.0 billion and $2.9 billion.

AES' first-quarter proportional free cash flow was down $12 millionyear over year to $253 million, reflecting lower margins across nearly all of itsbusiness segments, led by the Mexico, Central America and Caribbean segment, whichreported results of $13 million, or down $101 million year over year, given lowercollections in the Dominican Republic and Puerto Rico and higher tax payments.

AES' European business contributed first-quarter proportionalfree cash flow of $76 million, down $63 million year over year while the U.S. business'proportional free cash flow narrowed to $133 million from $155 million in the samequarter of 2015. The Andes business booked a $13 million year-over-year decreasein proportional free cash flow to $4 million, results showed.

AES' Brazilian business returned to positive proportional freecash flow during the 2016 first quarter. It posted a result of $34 million comparedto a loss of $47 million for the same quarter of 2015. The Asian business saw first-quarterproportional free cash flow increase $39 million year over year to $43 million.

AES' first-quarter consolidated net cash provided by operatingactivities increased $203 million year over year to $640 million reflecting highercollections in Brazil. The company generated $3.47 billion in revenues during theopening months of 2016, down from $3.98 billion in the first quarter of 2015.

AES booked $126 million, or 19 cents per share, in first-quarterGAAP earnings, down from $142 million, or 20 cents per share, in the correspondingquarter of 2015.