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Connecticut Water Service Inc. (CTWS - Snapshot Report) reported first-quarter 2014 earnings of 27 cents per share, in line with the Zacks Consensus Estimate. Earnings however increased 12.5% from the year-ago comparable period.

The year-over-year increase was attributable to a higher top line and decline in total operating expenses.

The company released its earnings on May 8, 2014. Since then the company has gained a marginal 1.8% closing at $32.38 on Friday.

Total Revenue

In the quarter under review, Connecticut Water’s total revenues were $22.03 million, surpassing the Zacks Consensus Estimate of $21.0 million by 6.3%. Total revenues were also up 2.4% year over year.

The year-over-year growth was primarily due to higher contribution from its Water Activities and Services and Rentals business segments.

Operational Update

In the first quarter, the company’s operating and maintenance expenses were $10.7 million, up 2.8% year over year primarily due to  higher employee wages, benefits and incentives.

Connecticut Water’s operating income increased 14.7% year over year to $4.1 million.

Interest expenses totaled $1.7 million in first quarter 2014, up 30.8% from the year-ago period. The increase was due to a timing change in 2013 associated with a patronage refund from a bank cooperative.

Financial Update

As of Mar 31, 2014, Connecticut Water’s current assets were $43.8 million compared with $33.1 million as of Dec 31, 2013.

Net Utility Plant was worth $473.7 million as of Mar 31, 2014 versus $449.6 million as of Dec 31, 2013.

Long-term debt as of Mar 31, 2014, was $174.4 million compared with $177.9 million as of Dec 31, 2013.

Other Releases

California Water Service Group’s (CWT - Snapshot Report) loss of 11 cents in first-quarter 2014 was wider than the Zacks Consensus Estimate of a loss of 7 cents.

American States Water Company (AWR - Snapshot Report) posted first-quarter 2014 earnings of 28 cents per share, lagging the Zacks Consensus Estimate of 32 cents by 12.5%.

Consolidated Water Co. Ltd. (CWCO - Snapshot Report) reported first-quarter 2014 earnings per share of 7 cents, beating the Zacks Consensus Estimate of 5 cents by 40%.

Our View

The investments made by the company to improve its infrastructure are likely to boost earnings in 2014 and beyond.  

Connecticut Water Service currently has a Zacks Rank #3 (Hold).

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