A month has gone by since the last earnings report for Consolidated Water (CWCO Quick QuoteCWCO - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Consolidated 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 drivers.

Consolidated Water Q3 Earnings & Sales Beat Estimates

Consolidated Water Co. Ltd. reported third-quarter 2021 earnings of 9 cents per share, beating the Zacks Consensus Estimate of 7 cents by 28.6%. In the year-ago quarter, CWCO reported earnings of 12 cents per share.

Revenues

Total revenues for third-quarter 2021 came in at $16.4 million, which surpassed the Zacks Consensus Estimate of $16 million by 1.3%.

Total revenues were down 7.3% year over year. The year-over-over year decline in revenues was due to lower contribution from the Service and Manufacturing segment.

Segment Details

Retail revenues for third-quarter 2021 improved 5.2% year over year to $5.3 million. This reflects a 1% increase in the volume of water sold by Cayman Water.

Bulk revenues came in at $6.9 million for third-quarter 2021, up 13.1% from the prior-year figure. The increase in revenues was due to an increase in energy costs for CW-Bahamas, which increased the energy pass-through component of CW-Bahamas’ rates.

Manufacturing revenues amounted to $1.08 million for the third quarter, down 66.8% year over year. The year-over-year decline was due to a decrease in orders from Aerex’s former largest customer.

Services revenues were $3.21 million for the third quarter, down 4.2% year over year.

Other Details

General and administrative expenses for the quarter decreased 8.3% from the year-ago level to $4.35 million.

Interest income for the reported quarter was $0.17 million, up 2.5% from the year-ago quarter.

Consolidated Water’s subsidiary, PERC Water continued to expand recurring revenues by signing a five-year wastewater plant maintenance services contract with a gaming and live entertainment business in Southern California.

The Cayman Islands government announced that the country would reopen its borders for nearly all vaccinated travelers from Nov 20, 2021, which is expected to give rise to fresh demand for Consolidated Water in the fourth quarter.

Financial Highlights

Cash and cash equivalents as of Sep 30, 2021 were $40.4 million, down from $43.8 million on Dec 31, 2020.

Long-term debt as of Sep 30, 2021 was $0.14 million compared with $0.13 million on Dec 31, 2020.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -12.5% due to these changes.

VGM Scores

Currently, Consolidated Water has a subpar Growth Score of D, though it is lagging a bit 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 second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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.