Hoping to pounce on AGL shares? Here’s what to watch when the energy giant reports this week

AGL Energy Limited (ASX: AGL) shares will likely be front of mind this week as the energy producer and retailer gears up to release its full-year earnings.

The S&P/ASX 200 Index (ASX: XJO) giant is expected to drop its financial year 2022 results on Friday, alongside many other market favourites.

The AGL share price slumped slightly over the last financial year. It’s currently trading at $8.51.

So, what might market watchers expect to hear of AGL’s earnings, dividends, and expenses later this week? Let’s take a look.

AGL shares in focus as the company gears up to report

Interested in AGL shares this reporting season? There are a number of reasons the company’s earnings might disappoint some market watchers.

Let’s start with the energy giant’s own expectations. AGL downgraded its full-year guidance back in May, blaming a generator fault at its Loy Yang A power station.

Its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is now expected to come in between $1.23 billion and $1.3 billion. Meanwhile, its underlying after-tax profit is expected to be between $220 million and $270 million.

For context, it reported $1.66 billion of underlying EBITDA and an after-tax profit of $537 million for financial year 2021.

AGL also offered investors 75 cents per share of unfranked dividends in financial year 2021. Brokers have tipped that to fall significantly this time around.

AGL’s latest interim dividend was 16 cents – down 60% on the prior corresponding period.

While some brokers think the company’s final payout might match its interim dividend, others are sceptical. Indeed, many believe AGL’s final dividend for financial year 2022 will be in the single digits, as my Fool colleague Tristan reports.

AGL’s controversial demerger might also weigh on the stock this earnings season. The company ultimately binned its plan to split in two, but not before forking out $160 million.

Finally, AGL’s ASX 200 peer Origin Energy Ltd (ASX: ORG) dropped its June quarter earnings late last month. Its CEO Frank Calabria said the three months ended 30 June were “an extraordinarily challenging quarter for the energy industry globally and in Australia”.

Thus, the final stretch of financial year 2022 could have been rough on AGL too.

No doubt all eyes will be on the AGL share price on Friday when the company drops its full-year earnings.

The post Hoping to pounce on AGL shares? Here’s what to watch when the energy giant reports this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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