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