AES Posts Higher Profit In Q3; Lifts FY09 Earnings Outlook; To Raise $1.58 Bln In New Capital

11/6/2009 12:36 PM ET

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(RTTNews) - Electric utility AES Corp. (AES: News ) said Friday that its third quarter profit increased from last year, helped by higher margins at generation businesses in Chile and in the Philippines. The company also said it will raise $1.58 billion in new equity by selling 15% stake to the Chinese government's investment division, China Investment Corp. Looking ahead, the company raised its earnings outlook for fiscal 2009.

Net income attributable to AES was $185 million or $0.28 per share for the third quarter, up from $145 million or $0.22 per share in the prior year quarter.

The Arlington, Virginia-based company posted net profit of $440 million, compared to $359 million in the third quarter of 2009.

Adjusted for mark-to-market, currency transaction and disposition/acquisition changes, earnings fell 16% to $0.26 per share from $0.31 per share in the previous year quarter.

On average, 3 analysts polled by Thomson Reuters expected the company to report earnings of $0.26 per share for the third quarter. Analysts' estimates typically exclude special items.

Consolidated gross profit for the quarter grew to $1.01 billion from $962 million a year earlier. Proportional gross profit fell to $555 million from $601 million, due to the unfavorable impact of foreign exchange rates, as well as lower volumes at the company's generation business in New York and its integrated utility in Indiana, IPL.

Third quarter revenues decreased to $3.84 billion from $4.32 billion in the same quarter last year, hurt by the strengthening of the U.S. Dollar relative to foreign currencies, and lower commodity input prices.

Paul Hanrahan, AES president and chief executive officer, said, "The strong quarterly performance was driven by higher margins at our generation businesses in Chile and in the Philippines. Contributions from these businesses helped us offset weak results at our North American operations which were negatively impacted by lower volumes."

Geographically, Latin America-Generation revenues dropped 16% to $1.01 billion, while revenue at the utility segment grew 4% to $1.67 billion.

North America-Generation generated $486 million in revenues, down 21% over a year ago, while Utilities brought in $266 million in the region, a 7.6% drop from the previous year.

Europe-Generation revenues declined 40% to $157 million. Revenue from Asia-Generation slipped 22% to $291 million.

In a separate development, AES said it has entered into a binding stock purchase agreement with a wholly-owned investment subsidiary of China Investment Corp. or CIC to raise $1.58 billion of new equity.