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Why Is American States Water (AWR) Down 1.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for American States Water (AWR - Free Report) . Shares have lost about 1.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is American States Water due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

American States Water Q2 Earnings Match Estimates

American States Water reported second-quarter 2020 operating earnings of 69 cents per share, which matched the Zacks Consensus Estimate. Meanwhile, the bottom line improved 7.8% from 64 cents in the year-ago quarter.

Total Revenues

Operating revenues of $121.3 million beat the Zacks Consensus Estimate of $119 million by 1.7%. However, the top line dipped 2.7% from $124.6 million in the prior-year quarter. Total revenues decreased primarily due to lower revenues in Water and Contracted services segments.

Operational Update

In the quarter under review, American States Water’s total operating expenses were $85.6 million, up 0.4% year over year.

Operating income was $35.7 million, down 9.4% year over year.

Interest expenses were $5.3 million, down 15.3% year over year. Also, interest income was $0.5 million, down from $0.9 million in the prior-year quarter.

Segment Details

Earnings in the Water segment were 54 cents, up from 51 cents in the prior-year quarter.

Earnings in the Electric segment of 3 cents were up from a cent in the year-ago quarter.

Earnings in the Contracted Services segment were 12 cents, on par with the year-ago quarter’s figure.

Financial Update

As of Jun 30, 2020, American States Water’s cash and cash equivalents were $6.5 million compared with $1.3 million as of Dec 31, 2019.

As of Jun 30, 2020, the company’s long-term debts were $280.9 million, flat with the figure as of Dec 31, 2019.

Dividend Update

The company declared a 9.8% hike in its quarterly dividend to 33.5 cents per share, payable Sep 1 to its shareholders of record on Aug 17. The company’s current policy is to see a dividend CAGR of more than 7% in the long term.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, American States Water has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise American States Water has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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