AES Clocks ~14% Revenue Growth In Q1, Introduces 4 New Strategic Business Units

AES Corporation AES reported first-quarter FY23 revenues of $3.24 billion, up 13.6% year over year. Revenues beat the consensus of $2.84 billion.
The diversified power generation and utility company registered an adjusted EPS of $0.22, marginally missing the consensus of $0.23.
Favorable contributions from the Energy Infrastructure and New Energy Technology Strategic Business Units bolstered Q1 revenue growth. However, lower margins due to unfavorable weather conditions at the Utilities strategic business unit resulted in an earnings miss.
The company's backlog was 11,932 MW, lower than the 12,179 MW backlog Y/Y. The backlog includes projects with signed contracts but has yet to be operational.
Net Income in Q1 rose 10.5% Y/Y to $189 million, while adjusted EBITDA was $628 million, up 1.1% Y/Y, driven by favorable wind and hydrology conditions and new businesses.
At quarter-end, AES held cash and equivalents of over $2 billion.
"I am also pleased to announce our four new Strategic Business Units, which better reflect the greatly simplified company that AES is today," said CEO Andrés Gluski.
FY23 Outlook: The Company reaffirmed its 2023 guidance for Adjusted EPS of $1.65-$1.75. The consensus stands at $1.72.
AES expects 7% to 9% annualized growth rate target through 2025, from the base year of 2020.
On the flip side, lower margins from the LNG business due to the normalization of LNG prices and the roll-off of a gas supply contract are likely to weigh in FY23.
The company also cautioned about lower contract margins in Chile and higher interest expenses in Colombia.
Price Action: AES shares closed higher by 0.13% at $22.48 on Thursday.

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