We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
American Water Works (AWK) Beats Q2 Earnings Estimates
Read MoreHide Full Article
Water utility American Water Works Company’s (AWK - Free Report) second-quarter earnings per share of 77 cents were 6.9% higher than the Zacks Consensus Estimate of 72 cents.
Earnings were higher than the year-ago figure of 68 cents by 13.2%. The increase was attributable to higher earnings at the Regulated business segment (up 4.2% y/y), driven by infrastructure investment. In addition, the company benefited from the contribution of its acquisitions.
Second-quarter total revenues of $827 million lagged the Zacks Consensus Estimate of $839 million by 1.4%. Total revenues were up 5.8% year over year.
As of Aug 3, 2016, the company received nearly $66.7 million in additional annualized authorized revenues from general rate cases, step increases, and infrastructure charges.
Highlights of the Release
Total operating expenses in the reported quarter increased 4.8% to $528 million, primarily due to a 4.5% increase in operation and maintenance expenses. Interest expenses increased 6.6% to $81 million from $76 million in the year-ago quarter.
For the first six months of 2016, the company made capital investments of nearly $552 million, which included $24 million for regulated acquisitions.
As of Aug 3, 2016, American Water Works awaited final orders or proposed settlements for general rate cases in six states, with nearly $110.4 million in total additional revenues and $3 million in infrastructure charges on request.
Regulated Businesses net income was $135 million compared with $122 million for the same period in 2015.
Market-based Businesses net income was $13 million compared with $12 million for the second quarter 2015.
Financial Highlights
Cash and cash equivalents were $52 million as of Jun 30, 2016, up from $45 million as of Dec 31, 2015.
Long-term debt was $5,861 million as of Jun 30, 2016, marginally lower than $5,874 million as of Dec 31, 2015.
Guidance
American Water Works affirmed its 2016 earnings guidance from continuing operations in the range of $2.75 to $2.85 per diluted share.
Ageing infrastructure is a pressing problem for most of the water utilities. For 2016, the company’s capital investment budget is in the range of $1.4 billion to $1.5 billion, a major part of which will be invested to improve its water and wastewater systems.
Other Company Releases
Aqua America Inc.’s second-quarter earnings of 33 cents per share were on par with the Zacks Consensus Estimate.
California Water Service Group’s (CWT - Free Report) second-quarter 2016 operating earnings per share of 24 cents lagged the Zacks Consensus Estimate of 26 cents by 7.69%.
SJW Corp.’s (SJW - Free Report) second-quarter 2016 operating earnings per share of 66 cents surpassed the Zacks Consensus Estimate of 41 cents by 60.98%.
Our View
Second-quarter results of American Water Works were impressive thanks to its consistent investment in regulated operations and contribution from its acquired assets.
Its inorganic growth strategy is helping it to expand its operations and market reach. The completed acquisitions have added 7,600 customers year to date to its existing base, while the pending acquisitions when completed will likely increase its customer base by 47,800.
We believe consolidation is the need of the hour in the fragmented U.S. water utility space. The old water utility infrastructure needs ample investments, which are easier for bigger players to make. Consolidation would therefore drive the necessary infrastructure overhauls that have become imperative for the industry at large.
American Water Works is making the right moves regarding capital investments and acquisitions of other smaller water and wastewater service providers.
American Water Works Company currently has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
American Water Works (AWK) Beats Q2 Earnings Estimates
Water utility American Water Works Company’s (AWK - Free Report) second-quarter earnings per share of 77 cents were 6.9% higher than the Zacks Consensus Estimate of 72 cents.
Earnings were higher than the year-ago figure of 68 cents by 13.2%. The increase was attributable to higher earnings at the Regulated business segment (up 4.2% y/y), driven by infrastructure investment. In addition, the company benefited from the contribution of its acquisitions.
Total Revenues
Second-quarter total revenues of $827 million lagged the Zacks Consensus Estimate of $839 million by 1.4%. Total revenues were up 5.8% year over year.
As of Aug 3, 2016, the company received nearly $66.7 million in additional annualized authorized revenues from general rate cases, step increases, and infrastructure charges.
Highlights of the Release
Total operating expenses in the reported quarter increased 4.8% to $528 million, primarily due to a 4.5% increase in operation and maintenance expenses. Interest expenses increased 6.6% to $81 million from $76 million in the year-ago quarter.
For the first six months of 2016, the company made capital investments of nearly $552 million, which included $24 million for regulated acquisitions.
As of Aug 3, 2016, American Water Works awaited final orders or proposed settlements for general rate cases in six states, with nearly $110.4 million in total additional revenues and $3 million in infrastructure charges on request.
AMER WATER WORK Price, Consensus and EPS Surprise
AMER WATER WORK Price, Consensus and EPS Surprise | AMER WATER WORK Quote
Segment Details
Regulated Businesses net income was $135 million compared with $122 million for the same period in 2015.
Market-based Businesses net income was $13 million compared with $12 million for the second quarter 2015.
Financial Highlights
Cash and cash equivalents were $52 million as of Jun 30, 2016, up from $45 million as of Dec 31, 2015.
Long-term debt was $5,861 million as of Jun 30, 2016, marginally lower than $5,874 million as of Dec 31, 2015.
Guidance
American Water Works affirmed its 2016 earnings guidance from continuing operations in the range of $2.75 to $2.85 per diluted share.
Ageing infrastructure is a pressing problem for most of the water utilities. For 2016, the company’s capital investment budget is in the range of $1.4 billion to $1.5 billion, a major part of which will be invested to improve its water and wastewater systems.
Other Company Releases
Aqua America Inc.’s second-quarter earnings of 33 cents per share were on par with the Zacks Consensus Estimate.
California Water Service Group’s (CWT - Free Report) second-quarter 2016 operating earnings per share of 24 cents lagged the Zacks Consensus Estimate of 26 cents by 7.69%.
SJW Corp.’s (SJW - Free Report) second-quarter 2016 operating earnings per share of 66 cents surpassed the Zacks Consensus Estimate of 41 cents by 60.98%.
Our View
Second-quarter results of American Water Works were impressive thanks to its consistent investment in regulated operations and contribution from its acquired assets.
Its inorganic growth strategy is helping it to expand its operations and market reach. The completed acquisitions have added 7,600 customers year to date to its existing base, while the pending acquisitions when completed will likely increase its customer base by 47,800.
We believe consolidation is the need of the hour in the fragmented U.S. water utility space. The old water utility infrastructure needs ample investments, which are easier for bigger players to make. Consolidation would therefore drive the necessary infrastructure overhauls that have become imperative for the industry at large.
American Water Works is making the right moves regarding capital investments and acquisitions of other smaller water and wastewater service providers.
American Water Works Company currently has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>