Must-know: 3Q14 revenue composition of AES

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Year-over-year revenue growth

AES Corporation (AES) reported sales of $4.44 billion in the third quarter of 2014. Revenue increased by 11.1% over the same quarter last year. Despite this, results still missed analyst expectations by 12.0%. The consensus estimate for AES’ third-quarter revenue was $4.97 billion.

Revenue

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Composition of revenue

AES has business in diverse geographies. The company reports revenue under six strategic business units (or SBUs):

  • Brazil
  • US
  • Andes (Chile, Columbia, and Argentina)
  • MCAC (Mexico, Central America, and the Caribbean)
  • EMEA (Europe, the Middle East, and Africa)
  • Asia

Brazil generates the highest revenue for AES. In 3Q14, Brazil brought in 35% of the company’s revenue. The US region earned $1 billion, or 22% of AES’ revenues, during the quarter.

Each SBU registered revenue growth compared to the same quarter last year. Among all SBUs, Brazil showed the highest year-over-year revenue growth for AES. Revenue from Brazil grew by 21.4% in the third quarter of 2014 compared to the same quarter in 2013.

AES’ position in the industry based on revenues

In 2013, AES earned revenue totaling $17.1 billion. The company generates the fourth-highest revenue among all power companies operating in the US. Only Exelon Corporation (EXC), Duke Energy (DUK), and Southern Company (SO) surpass AES in revenue. These three companies are part of the top five holdings of Utilities Select Sector SPDR (XLU).

Having looked at the revenue share for each of the SBUs, let us now look at the earnings contribution of each of these SBU.

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