The AES Corporation : AES 1Q Profit Up 52% On Revenue Gains; Adds $180 Million To Share Buyback Program
05/04/2012| 06:49am US/Eastern
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AES Corp.'s (AES) first-quarter profit rose 52% as the power company's revenue strengthened, helped by gains from acquisitions.
Friday, the company also said it will add $180 million to its share buyback program, a move to boost shareholder value. The boost brings the company's authorization for share repurchases to $302 million.
AES, which operates utilities and wholesale power generators in the U.S. and Latin America, has been working to pay down its debt, in part by selling assets to focus on markets where it has a competitive advantage. It said in February it would sell roughly $2 billion of assets in markets like China as it plans to expand in core markets of Brazil, Chile and the U.S. Last month, Fitch Ratings upgraded AES Corp.'s (AES) issuer default rating a notch, citing the company's focus on core geographic markets.
AES bought utility Dayton Power & Light owner DPL Inc. (DPL) last year for $3.5 billion and in February said it would sell two units that own and operate a natural gas-fired power plant in Pennsylvania for $304 million in cash and assumption of debt to PPL Corp. (PPL).
AES posted a profit of $341 million, or 44 cents a share, up from $224 million, or 28 cents a share, a year earlier.
Excluding mark-to-market derivative impacts, currency transactions and other items, earnings rose to 37 cents from 24 cents. Analysts polled by Thomson Reuters expected earnings of 27 cents a share.
Revenue rose 14% to $4.74 billion, helped by gains from new businesses such as DP&L, increased volume in Latin America, and arbitration settlement in Spain and partially offset by decreased spot prices in Chile, a delayed tariff reset in Brazil and DP&L-related financing costs.
Gross margin narrowed to 22.7% from 23.9% as input costs rose 16%.
Interest expenses were up 23.
Revenue from the Latin American utilities business, the biggest top-line contributor, slipped 5.8%%. Latin America generation revenue was up 12%.
Shares of AES, which backed its full-year adjusted earnings view, closed at $12.21 Thursday and were inactive premarket. The stock is up 3.1% since the start of the year.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com
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