A month has gone by since the last earnings report for Consolidated Water (CWCO Quick QuoteCWCO - Free Report) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Consolidated Water due for a pullback? 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.

Consolidated Water Q3 Earnings & Sales Miss Estimates

Consolidated Water Co. Ltd. reported third-quarter 2020 earnings of 12 cents per share, which missed the Zacks Consensus Estimate of 15 cents by 20%.

Total Revenues

The company’s total third-quarter revenues came in at $17.7 million, up 11.3% from the year-ago figure of $15.9 million. However, the reported revenues missed the Zacks Consensus Estimate of $19.1 million by 7.3%.

Segment Details

Retail revenues for the third quarter decreased 20.4% year over year to $4.99 million. This was mainly due to the continuing closure of the borders in the Cayman Islands to tourist travel in response to the pandemic and wetter weather conditions in the Cayman Islands during the third quarter.

Bulk revenues came in at $6.06 million, down 5.9% from the prior-year figure. The decrease in revenues was due to lower energy costs in the Bahamas, which in turn reduced energy pass-through charges to customers therein.

Manufacturing revenues amounted to $3.25 million, up 5.9% year over year.

Services revenues were $3.35 million for the quarter, up 252.6% from $0.9 million in the year-ago period.

Highlights of the Release

Gross profit for the third quarter was $6.2 million, down 7.3% from $6.7 million in the year-ago period.

General and administrative expenses increased 12.6% from the year-ago level to $4.81 million.

For the third quarter, revenues improved year over year due to $3.2 million revenue contribution by the new PERC Water subsidiary, which provides design, engineering, construction and management services for the water treatment infrastructure in the United States.

Financial Highlights

Cash and cash equivalents as of Sep 30, 2020 were $38.2 million, down from $42.9 million on Dec 31, 2019.

Long-term debt as of Sep 30, 2020 was $0.14 million compared with $0.06 million on Dec 31, 2019.

Cash used in operating activities for the first nine months of 2020 was $10.9 million versus cash provided from operating activities of $5.6 million in the comparable year-ago period.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -16.67% due to these changes.

VGM Scores

At this time, Consolidated Water has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 this revision indicates a downward shift. It's no surprise Consolidated Water has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.