Seeking Alpha: AES - Above Average Growth, An Improving Balance Sheet, Higher Dividends

It has taken a number of years, but global electrical utility AES Corp. (AES) finally seems to have a plan in place that can drive reasonable returns for shareholders. While commodity costs and forex represent some challenges for the near term, AES has a good long-term plan in place with respect to driving out costs, focusing on high-potential growth markets, and seeing cash go back to shareholders.

Minimal Surprises In The Fourth Quarter
AES offered relatively few surprises for the fourth quarter. Revenue rose about 1% as reported, with the company's Latin American operations representing about two-thirds of the revenue base. Profitability was better, though, as GAAP gross margin, adjusted gross margin, and proportional gross margin all showed solid progress.

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AES: Above Average Growth, An Improving Balance Sheet, Higher Dividends

Seeking Alpha: Will AES Finally Make Good In 2012?

Waiting for global electrical utility operator AES to pay off as an investment has been a lot like waiting for Godot, though I don't remember so many disappointments in Beckett's play. Although AES has a great collection of power generation assets, it has for some time now and management has never yet managed to wring much value out of them. With new management and a new plan, perhaps long-suffering investors will see some rewards for their patience in 2012.

The New New Plan
Long-term investors in AES have heard enough new plans over the years that they should well be skeptical. In particular, AES has a long history of shuffling the deck – selling this or that project and investing hundreds of millions into the next “big thing” all in the hopes of generating some real returns from a large asset base. Heretofore, it hasn't worked out so well and investors would have frankly done better with a money-market account for the last decade.

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Will AES Finally Make Good In 2012?

Investopedia: Can EnergySolutions Power Up With Nuclear Energy?

Shakespeare may have thought that it was better to try and fail than to never try at all, but Wall Street is seldom so forgiving. While EnergySolutions (NYSE:ES) has a lot going for it as a very rare pure play on nuclear energy services, the company is going through a difficult adjustment. After trying to compete as a tier-1 player, the company looks to be retrenching, and near-term earnings performance is not looking robust. Nevertheless, patient investors may want to keep an eye on this name as there may be more power to the business than near-term results suggest. (For background reading, check out The Biggest Nuclear Operators In The United States.)

A Tough End to the Year 

Due in part to some accounting readjustments, the fourth quarter of this fiscal year was not very strong for EnergySolutions. Revenue was effectively flat, gross profit was down 15%, and EBITDA fell 6%. None of that is likely to impress analysts, even on an adjusted basis.

Looking around on a division basis does not really help the picture much. The company's international business, its largest component, was basically flat on a revenue basis, but operating income fell more than 20% on lower fees from a major contract. Elsewhere, the commercial services business saw revenue jump, but operating income swung to a loss anyway.

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