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AES Corp beats second-quarter profit estimates on renewables strength

Utility AES Corporation beat Wall Street expectations for its second-quarter profits on Thursday. This was largely due to higher earnings in the renewables segment, and a reduced tax rate.

A global push to find cleaner power sources is driving the company's renewables unit, which has grown significantly since last year. This comes at a time of record-breaking U.S. electricity consumption.

According to the U.S. Energy Information Administration, power consumption in 2025-2026 will reach record levels, largely due to Big Tech's increasing investment in artificial-intelligence technologies that are dependent on energy-intensive, data center facilities.

The backlog of power purchase agreements, which includes projects that have signed contracts, but are not yet operational, increased to 12 gigawatts from 11.7 GW the previous quarter.

Andres Gluski, CEO of Gluski Group, said: "With 1.6 GW signed PPAs for data centers since May's first quarter results, we are a market leader in the segment that is growing the fastest."

AES Corp. has signed two long term power purchase agreements to provide 650 megawatts of solar capacity for Meta Platforms' data centers in Texas & Kansas.

The renewables unit saw a 4% increase in revenue to $644m, while utilities reported a nearly 6% rise to $954m.

The lower margins in energy infrastructure led to a 3% decline in the utility's revenue total, which was $2.9 billion in the second quarter.

According to LSEG, the Virginia-based firm posted an adjusted profit per share of 51 cents in the second quarter. This was compared with analysts' estimates of 40 cents. Reporting by Pooja menon, Arunima kumar and Vallari srivastava in Bengaluru. Editing by Anil d'Silva

(source: Reuters)