Abstract

AES Corp will report fiscal fourth-quarter results on February 26, 2026 Post Market, with consensus pointing to softer revenue but improving per-share earnings and continued portfolio shift toward higher-margin contracted and regulated businesses.

Market Forecast

For the quarter to be reported, the company’s guidance and market tracking point to revenue of $3.03 billion, implying a year-over-year change of -1.23%, with an EPS estimate of $0.60, while EBIT is projected at $412.49 million; forecast EPS growth is 75.74% year over year and EBIT is expected to decline 22.17% year over year. Margin commentary implies a stable to modestly higher gross profit margin and steady net profit capture as portfolio mix tilts toward regulated utilities and long-term contracted renewables; adjusted EPS is forecast to expand on a lower revenue base. Main business momentum is expected to be supported by Utilities and Energy Infrastructure operations as rate base and contracted assets continue to ramp. The most promising segment is the Renewable Energy division, which is positioned to scale on commissioning activity and long-term offtake, though revenue cadence can be lumpy quarter to quarter.

Last Quarter Review

In the previous quarter, AES Corp delivered revenue of $3.35 billion, a gross profit margin of 21.93%, GAAP net profit attributable to the parent of $639.00 million, a net profit margin of 19.07%, and adjusted EPS of $0.75, with year-over-year revenue growth of 1.89% and EPS growth of 5.63%. A key financial highlight was a sharp sequential improvement in GAAP profitability, with net profit rising quarter on quarter by 772.63% on improved portfolio performance and nonrecurring items. Main business highlights included revenue contributions of $1.48 billion from the Energy Infrastructure segment, $1.11 billion from the Utilities segment, and $0.82 billion from Renewables, reflecting a balanced mix with incremental growth in contracted and regulated lines.

Current Quarter Outlook (with major analytical insights)

Main business: Regulated Utilities and Energy Infrastructure

Revenue mix signals that regulated utilities and contracted infrastructure remain the earnings anchor this quarter. With the revenue base anticipated at $3.03 billion and EBIT guided to $412.49 million, the earnings trajectory depends on steady rate-base expansion and stable demand in core service territories. Management’s portfolio tilt toward higher-certainty cash flows usually supports a more resilient gross margin profile; given last quarter’s gross margin of 21.93%, modest expansion is possible if fuel and purchased power costs remain contained and customer growth continues. On the regulatory side, approved rate plans and recovery mechanisms should help stabilize margins against fuel volatility, though timing of true-ups can influence quarterly optics. Infrastructure cash flows are sensitive to availability and contracted capacity payments, which historically smooth earnings cadence. We expect net profit margin to hold near recent levels on mix and cost discipline, even with slightly lower revenue, as the company prioritizes contracted/regulated returns over merchant exposure.

Most promising business: Renewable Energy scale-up

The Renewable Energy division is positioned for multi-year growth as projects reach commercial operations under long-term power purchase agreements. While last quarter renewables contributed $0.82 billion of revenue, the coming quarter’s commissioning schedule and seasonality can produce uneven revenue recognition, yet recurring contracted cash flows enhance visibility for EPS. The forecast of $0.60 EPS on a revenue base of $3.03 billion suggests improved conversion from revenue to earnings, consistent with the ramp of newer, higher-margin renewable assets. Key variables include project energizations, interconnection timing, and supply-chain normalization. Delays can push revenue into subsequent quarters, but once online, projects typically deliver predictable margins that support consolidated gross margin stability. Financing costs remain a swing factor; efficient tax equity structures and declining equipment costs could offset higher base rates, preserving project returns and sustaining EPS progression despite a slight revenue dip year over year.

Factors most impacting the stock this quarter

Two near-term factors are likely to dominate the stock reaction: EPS delivery versus the $0.60 estimate and evidence of continued net margin stability. A beat on adjusted EPS, even with revenue contracting by 1.23%, would reinforce the narrative of portfolio quality improving earnings conversion. Conversely, any pressure on net margin from cost pass-through lags or outage-related availability would weigh on sentiment. Second, disclosures on renewable commissioning and 2026 pipeline milestones could influence valuation, particularly if management updates on interconnection bottlenecks or tax credit monetization cadence. Clear progress on contracted backlog conversion reduces perceived risk and supports multiple expansion. Finally, any regulatory updates within the utilities segment, such as rate decisions or capex recovery, may recalibrate expectations for 2026 EBIT, thereby affecting how investors interpret this quarter’s EBIT guidance decline of 22.17% year over year.

Analyst Opinions

Across recent commentary, the balance of views skews moderately bullish, centered on improving EPS quality and visibility despite softer top-line guidance. Analysts emphasizing portfolio rebalancing toward regulated and contracted assets expect adjusted EPS resilience and a constructive path for margin stability, noting the $0.60 EPS estimate accompanied by a year-over-year increase of 75.74%. Supportive views highlight that the prior quarter’s $0.75 adjusted EPS and 21.93% gross margin provide a credible base to absorb a 1.23% revenue decline, while renewable additions and regulated rate base growth underpin midterm earnings. The minority cautious camp points to the 22.17% year-over-year decline in EBIT guidance as a signal of expense and timing headwinds, warning that commissioning slippage in renewables or weather impacts at utilities could compress quarterly profitability. However, the predominating perspective is that management’s execution on contracted backlog and visibility into regulated returns should sustain EPS ahead of revenue trends, keeping the stock biased to react to EPS and margin outcomes more than to the top line. In this context, investors will watch whether AES Corp demonstrates stable net profit margins near the last quarter’s 19.07% level and articulates a clear runway for renewable project energizations into 2026.