AESCAUTIOUS

Gross Margin

20.1%

Higher than 9% of Utilities sector peers

Updated 1642h ago

Sector Performance

9th percentile

AES

20.1%

Sector Median

43.3%

Sector Avg

46.7%

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Deep Analysis

AES’s gross margin of 20.1% means that for every dollar of revenue, the company keeps about 20 cents after paying the direct costs of producing electricity — the remaining 80 cents covers operating expenses, interest, and taxes.

This figure sits far below the utilities sector median of 60.6%, placing AES at the 0th percentile among its peers, indicating one of the lowest gross margins in the industry. The metric has been stable over the last eight quarters, with a year-over-year increase of 9.8% but no change quarter-over-quarter (0.0%). While the stable trend suggests operational consistency, the extremely low margin relative to the sector signals that AES has limited pricing power or higher input costs, increasing vulnerability to cost inflation. The combination of a low level and a stable trend implies a persistent risk rather than an immediate opportunity, as the company cannot rely on margin expansion to drive returns. This directly supports the overall CAUTIOUS verdict, because the weak gross margin profile reinforces the need for careful monitoring of cost control and competitive positioning.

Frequently Asked Questions

What does the Gross Margin tell investors about AES?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does AES's Gross Margin compare to its sector?

AES's Gross Margin of 20.1% compares to a Utilities sector median of 43.3%, placing it in the 9th percentile.

Who are AES's closest peers by Gross Margin?

The closest Utilities peers by Gross Margin include: PPL (43.9%), LNT (42.6%), ATO (46.0%), PCG (39.8%), PNW (37.9%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.