Oct 31 (Reuters) – AES Corp beat Wall Street estimates for third-quarter profit on Thursday, driven by higher earnings from its renewables and utilities segments and a lower tax rate.
The Virginia-based company saw considerable growth in its renewables unit last year, driven by a global push for cleaner power generation, especially at a time when U.S. power demand is expected to hit record highs.
Its power purchase agreement backlog, which consists of projects with signed contracts but not yet operational, saw an uptick to 12.7 gigawatts (GW) from 12.6 GW in the previous quarter.
Utilities are also projected to see a boom in demand for electricity over the next decade, primarily due to the power needs of AI and data centers.
In September, McKinsey estimated that U.S. data center energy consumption would rise to 606 terawatt-hours (TWh) by 2030, representing 12% of the country’s total power demand.
One terawatt-hour can power 70,000 homes for a year.
“Since our last call, we have signed or been awarded 2.2 GW of long-term contracts for renewable or new data center load growth at our U.S. utilities,” AES Chief Executive Officer Andres Gluski said.
The utility posted revenue of $3.29 billion for the July-September quarter, down from $3.43 billion in the same quarter last year, due to lower sales at its energy infrastructure unit.
However, earnings in its utilities segment rose 9%, while those in its renewables segment rose 2.5%.
The company reaffirmed that its full-year adjusted profit forecast would come in at the upper half of $1.87 per share to $1.97 per share, driven by new renewables commissionings, rate base growth, and improved margins in Chile.
AES posted an adjusted profit of 71 cents per share in the third quarter, compared to analysts’ estimate of 64 cents per share, according to data compiled by LSEG.
(Reporting by Seher Dareen in Bengaluru; Editing by Mohammed Safi Shamsi)
