Water utility company, American Water Works Company’s (AWK - Free Report) first-quarter 2017 earnings per share of 52 cents were on par with the Zacks Consensus Estimate. Earnings were up 13.0% from the year-ago quarter.
The increase in earnings can be attributed to higher earnings at the Regulated businesses and Market-based business segments.
Total Revenue
First-quarter total revenue of $756 million lagged the Zacks Consensus Estimate of $765 million by 1.2%. However, reported revenues were up 1.8% year over year.
Highlights of the Release
Total operating expenses in the reported quarter were $529 million, in line with the year-ago quarter.
Operating income in the reported quarter were $227 million, up 6.1% year over year.
In the first quarter, capital expenditures were $242 million to upgrade and maintain the existing infrastructure of the company.
Segment Details
Regulated businesses’ net income was $94.1 million, up 8.1% from $87.1 million reported in year-ago period. The year-over-year increase was due to additional authorized revenues and surcharges to support its infrastructure investments, acquisitions and organic growth.
Market-based businesses’ net income was $6.6 million compared with $6.1 million a year ago. The improvement in income was due to better contribution from The Homeowner Services Group and Keystone, partially offset by lower capital upgrades in the Military Services Group.
Financial Highlights
Cash and cash equivalents were $78 million as of Mar 31, 2017, up from $75 million as of Dec 31, 2016.
Long-term debt was $5,753 million as of Mar 31, 2017, lower than $5,759 million as of Dec 31, 2016.
Guidance
American Water Works reaffirmed its 2017 earnings guidance from continuing operations to the range of $2.98–$3.08 per diluted share.
Ageing infrastructure is a pressing problem for most water utilities. For 2017, American Water Works’ capital investment budget is $1.5 billion. The five-year plan of the company is to invest $5.9 billion in infrastructure improvement.
Our View
American Water Works’ first-quarter results were on par with expectations, courtesy consistent investments in regulated operations and contribution from the acquired assets.
The company continues to add customers and expand its market reach through acquisitions and organic growth. Year to date, the company added 16,700 customers through closed acquisitions and organic growth.
Consolidation is the need of the hour in the fragmented U.S. water utility space. Consequently, consolidation would drive the necessary infrastructure overhauls that have become imperative for the industry at large. American Water Works is expected to add nearly 33,000 customers in 2017 through acquisitions out of which 13,000 customers have already been added.
We expect the ongoing capital expenditure of the American Water Works’ to improve its water and wastewater systems, thereby allowing the company to provide efficient services to its expanding customer base.
American Water Works currently carries a Zacks Rank #4 (Sell).
Peer Releases
American States Water Company (AWR - Free Report) , reported first-quarter 2017 earnings of 34 cents per share, beating the Zacks Consensus Estimate of 32 cents by 6.25%. It carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
California Water Service Group (CWT - Free Report) , Zacks Rank #3 stock, reported first-quarter 2017 earnings of 2 cents per share, lagging the Zacks Consensus Estimate of 5 cents by 60.0%.
SJW Corporation (SJW - Free Report) a Zacks Rank #4 stock, reported first-quarter 2017 earnings of 18 cents per share, lagging the Zacks Consensus Estimate of 22 cents by 18.18%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Water utility company, American Water Works Company’s (AWK - Free Report) first-quarter 2017 earnings per share of 52 cents were on par with the Zacks Consensus Estimate. Earnings were up 13.0% from the year-ago quarter.
The increase in earnings can be attributed to higher earnings at the Regulated businesses and Market-based business segments.
Total Revenue
First-quarter total revenue of $756 million lagged the Zacks Consensus Estimate of $765 million by 1.2%. However, reported revenues were up 1.8% year over year.
Highlights of the Release
Total operating expenses in the reported quarter were $529 million, in line with the year-ago quarter.
Operating income in the reported quarter were $227 million, up 6.1% year over year.
In the first quarter, capital expenditures were $242 million to upgrade and maintain the existing infrastructure of the company.
Segment Details
Regulated businesses’ net income was $94.1 million, up 8.1% from $87.1 million reported in year-ago period. The year-over-year increase was due to additional authorized revenues and surcharges to support its infrastructure investments, acquisitions and organic growth.
Market-based businesses’ net income was $6.6 million compared with $6.1 million a year ago. The improvement in income was due to better contribution from The Homeowner Services Group and Keystone, partially offset by lower capital upgrades in the Military Services Group.
Financial Highlights
Cash and cash equivalents were $78 million as of Mar 31, 2017, up from $75 million as of Dec 31, 2016.
Long-term debt was $5,753 million as of Mar 31, 2017, lower than $5,759 million as of Dec 31, 2016.
Guidance
American Water Works reaffirmed its 2017 earnings guidance from continuing operations to the range of $2.98–$3.08 per diluted share.
Ageing infrastructure is a pressing problem for most water utilities. For 2017, American Water Works’ capital investment budget is $1.5 billion. The five-year plan of the company is to invest $5.9 billion in infrastructure improvement.
Our View
American Water Works’ first-quarter results were on par with expectations, courtesy consistent investments in regulated operations and contribution from the acquired assets.
The company continues to add customers and expand its market reach through acquisitions and organic growth. Year to date, the company added 16,700 customers through closed acquisitions and organic growth.
Consolidation is the need of the hour in the fragmented U.S. water utility space. Consequently, consolidation would drive the necessary infrastructure overhauls that have become imperative for the industry at large. American Water Works is expected to add nearly 33,000 customers in 2017 through acquisitions out of which 13,000 customers have already been added.
We expect the ongoing capital expenditure of the American Water Works’ to improve its water and wastewater systems, thereby allowing the company to provide efficient services to its expanding customer base.
American Water Works currently carries a Zacks Rank #4 (Sell).
Peer Releases
American States Water Company (AWR - Free Report) , reported first-quarter 2017 earnings of 34 cents per share, beating the Zacks Consensus Estimate of 32 cents by 6.25%. It carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
California Water Service Group (CWT - Free Report) , Zacks Rank #3 stock, reported first-quarter 2017 earnings of 2 cents per share, lagging the Zacks Consensus Estimate of 5 cents by 60.0%.
SJW Corporation (SJW - Free Report) a Zacks Rank #4 stock, reported first-quarter 2017 earnings of 18 cents per share, lagging the Zacks Consensus Estimate of 22 cents by 18.18%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on AWK - FREE
Get the latest research report on CWT - FREE
Get the latest research report on AWR - FREE
Get the latest research report on SJW - FREE