One ASX 200 stock that just upgraded earnings guidance (and one that downgraded)

The fortunes of these companies are very different at present. What's going on?

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A couple of ASX 200 stocks are moving in very different directions on Tuesday morning after updating their respective earnings guidance for FY 2024.

Let's now take a look at which stock has upgraded its guidance for the full year and which one has disappointingly downgraded its expectations.

AGL Energy Limited (ASX: AGL)

The AGL Energy share price is rising on Tuesday after the energy company released an update on its guidance for FY 2024.

At the time of writing, its shares are currently up almost 7% to $9.95.

According to the release, the company now expects its underlying EBITDA to be between $2,120 million and $2,200 million in FY 2024. This compares to its previous guidance of $2,025 million and $2,175 million.

This represents a sizeable 56% to 61.5% increase on FY 2023's underlying EBITDA of $1,361 million.

Also getting an upgrade was the ASX 200 stock's underlying net profit after tax. This is now expected to be between $760 million and $810 million, compared to its previous guidance of $680 million and $780 million.

In FY 2023, AGL reported underlying net profit after tax of $281 million. This new guidance represents an increase of 170% to 188% year on year.

Management explained that business has been booming during the second half. It said:

The update to guidance reflects the continued strong operational and financial performance of the business since the half year results, due to improved plant availability, flexibility and generation, higher consumer demand over the summer period in New South Wales and Queensland, and continued strong Customer Markets performance.

Sims Ltd (ASX: SGM)

The Sims share price is sinking today after the ASX 200 scrap metal stock downgraded its earnings guidance for FY 2024.

Its shares are currently down a sizeable 9.5% to $10.71.

Management advised that the second-half underlying EBIT will be marginally lower than the first half. This compares to its previous guidance for underlying EBIT "to improve in H2 FY24 compared to HY1 FY24."

Commenting on the guidance downgrade, Sim's CEO and managing director, Stephen Mikkelsen, said:

Ongoing market challenges have continued across the industry. SA Recycling and ANZ Metal have faced increased challenges compared to the first half. Pleasingly, despite North America Metal facing similar market challenges, we anticipate an improved second-half performance as early positive outcomes of the targeted strategies for margin improvement are emerging. We remain confident in the medium to long-term fundamentals, driven by global decarbonisation efforts.

Motley Fool contributor James Mickleboro 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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