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Why Is Essential Utilities (WTRG) Down 1.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Essential Utilities (WTRG - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Essential Utilities due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Essential Q2 Earnings and Revenues Surpass Estimates
Essential Utilities Inc. reported second-quarter 2021 earnings per share of 32 cents, which surpassed the Zacks Consensus Estimate of 29 cents by 10.3%.
The reported earnings figure was 10.3% higher than 29 cents per share recorded in the year-ago quarter.
Total Revenues
Second-quarter revenues of $397 million were up 3.3% year over year. The year-over-year improvement in total revenues was due to increased volume, growth and rate along with surcharge increases in the regulated water segment.
Revenues for the reported quarter surpassed the Zacks Consensus Estimate of $395 million marginally by 0.5%.
Highlights of the Release
The company continues to expand operations through acquisitions. The pipeline of potential water and wastewater municipal acquisitions, which Essential is actively pursuing, represents nearly 390,000 total customers or equivalent dwelling units.
To date in 2021, the regulated water segment received rate awards in different jurisdictions, which led to an increase in annualized revenues of the company by $16.7 million. Essential’s regulated natural gas segment has received rate awards or infrastructure surcharges in Pennsylvania and Kentucky, estimated to increase annualized revenues by $1.3 million. The company currently has proceedings pending for the water and gas segment, which is estimated to add $17.8 million to annual revenues, if approved.
Operation and maintenance expenses decreased 0.9% year over year to $127.5 million.
Operating income for the reported quarter was $129.4 million, up 5.1% year over year.
Interest expenses increased 0.8% to $52.1 million from $51.7 million in the year-ago quarter.
Financial Highlights
Current assets were $304.7 million as of Jun 30, 2021, compared with $380.2 million as of Dec 31, 2020. Long-term debt was $5,648.2 million as of Jun 30, 2021, higher than $5,507.8 million as of Dec 31, 2020.
Essential invested $404.6 million in the first half of 2021 to improve regulated water and natural gas infrastructure systems. The company remains on track to invest nearly $1 billion in 2021 to replace and expand its water and wastewater utility infrastructure as well as replace and upgrade its natural gas utility infrastructure.
Guidance
The company reaffirmed its 2021 earnings guidance at $1.64-$1.69 per share. The mid-point of the earnings guidance is on par with the corresponding Zacks Consensus Estimate of $1.67 per share. Essential expects earnings per share growth (CAGR) of 5-7% for 2020 through 2023.
It expects the customer base from the water segment to expand 2-3% on the back of acquisitions and organic customer growth.
The company plans to invest $550 million in the regulated water segment and $450 million in the regulated gas segment in 2021. This capital expenditure is part of its total investment plan of $3 billion through 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Essential Utilities has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Essential Utilities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Essential Utilities (WTRG) Down 1.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Essential Utilities (WTRG - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Essential Utilities due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Essential Q2 Earnings and Revenues Surpass Estimates
Essential Utilities Inc. reported second-quarter 2021 earnings per share of 32 cents, which surpassed the Zacks Consensus Estimate of 29 cents by 10.3%.
The reported earnings figure was 10.3% higher than 29 cents per share recorded in the year-ago quarter.
Total Revenues
Second-quarter revenues of $397 million were up 3.3% year over year. The year-over-year improvement in total revenues was due to increased volume, growth and rate along with surcharge increases in the regulated water segment.
Revenues for the reported quarter surpassed the Zacks Consensus Estimate of $395 million marginally by 0.5%.
Highlights of the Release
The company continues to expand operations through acquisitions. The pipeline of potential water and wastewater municipal acquisitions, which Essential is actively pursuing, represents nearly 390,000 total customers or equivalent dwelling units.
To date in 2021, the regulated water segment received rate awards in different jurisdictions, which led to an increase in annualized revenues of the company by $16.7 million. Essential’s regulated natural gas segment has received rate awards or infrastructure surcharges in Pennsylvania and Kentucky, estimated to increase annualized revenues by $1.3 million. The company currently has proceedings pending for the water and gas segment, which is estimated to add $17.8 million to annual revenues, if approved.
Operation and maintenance expenses decreased 0.9% year over year to $127.5 million.
Operating income for the reported quarter was $129.4 million, up 5.1% year over year.
Interest expenses increased 0.8% to $52.1 million from $51.7 million in the year-ago quarter.
Financial Highlights
Current assets were $304.7 million as of Jun 30, 2021, compared with $380.2 million as of Dec 31, 2020. Long-term debt was $5,648.2 million as of Jun 30, 2021, higher than $5,507.8 million as of Dec 31, 2020.
Essential invested $404.6 million in the first half of 2021 to improve regulated water and natural gas infrastructure systems. The company remains on track to invest nearly $1 billion in 2021 to replace and expand its water and wastewater utility infrastructure as well as replace and upgrade its natural gas utility infrastructure.
Guidance
The company reaffirmed its 2021 earnings guidance at $1.64-$1.69 per share. The mid-point of the earnings guidance is on par with the corresponding Zacks Consensus Estimate of $1.67 per share. Essential expects earnings per share growth (CAGR) of 5-7% for 2020 through 2023.
It expects the customer base from the water segment to expand 2-3% on the back of acquisitions and organic customer growth.
The company plans to invest $550 million in the regulated water segment and $450 million in the regulated gas segment in 2021. This capital expenditure is part of its total investment plan of $3 billion through 2023.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Essential Utilities has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Essential Utilities has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.