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American Water Works (AWK) Q4 Earnings: What's in Store?
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American Water Works Company Inc. (AWK - Free Report) will release fourth-quarter 2016 financial results on Feb 21, after the market closes. Last quarter, this water and wastewater service provider reported a positive earnings surprise of 5.0%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
The reduction in capital upgrade projects in its Military Services Group compared with previous years is likely to lower earnings of the company in the fourth quarter.
The company is experiencing an increase in Operating & Maintenance (Q&M) expenses. This increase in the to-be reported quarter can be attributed to O&M timing this year. Additionally, the regulated expenses might increase by $10 million, primarily as a result of dampening expenses, certain maintenance and repairs, as well as some project delays. This can have an adverse impact on the earnings of this water utility in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively show that American Water Works is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: Earnings ESP, the difference between the Most Accurate estimate of 55 cents and the Zacks Consensus Estimate of 56 cents is pegged at -1.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Water Works’ carries a Zacks Rank #3. Though the Zacks Rank #3 increases the possibility of a beat, its -1.79% ESP makes a surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few players in the Utility sector that have the right combination of elements to post an earnings beat this quarter.
Aqua America Inc. has an Earnings ESP of +3.45% and a Zacks Rank #3. It is expected to report fourth-quarter earnings on Feb 22.
Pinnacle West Capital Corporation. (PNW - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2. It is slated to report fourth-quarter earnings on Feb 24.
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American Water Works (AWK) Q4 Earnings: What's in Store?
American Water Works Company Inc. (AWK - Free Report) will release fourth-quarter 2016 financial results on Feb 21, after the market closes. Last quarter, this water and wastewater service provider reported a positive earnings surprise of 5.0%. Let’s see how things are shaping up prior to this announcement.
Factors to Consider
The reduction in capital upgrade projects in its Military Services Group compared with previous years is likely to lower earnings of the company in the fourth quarter.
The company is experiencing an increase in Operating & Maintenance (Q&M) expenses. This increase in the to-be reported quarter can be attributed to O&M timing this year. Additionally, the regulated expenses might increase by $10 million, primarily as a result of dampening expenses, certain maintenance and repairs, as well as some project delays. This can have an adverse impact on the earnings of this water utility in the fourth quarter.
Earnings Whispers
Our proven model does not conclusively show that American Water Works is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.
American Water Works Price and EPS Surprise
American Water Works Price and EPS Surprise | American Water Works Quote
Zacks ESP: Earnings ESP, the difference between the Most Accurate estimate of 55 cents and the Zacks Consensus Estimate of 56 cents is pegged at -1.79%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Water Works’ carries a Zacks Rank #3. Though the Zacks Rank #3 increases the possibility of a beat, its -1.79% ESP makes a surprise prediction difficult.
Note that we caution against Sell-rated stocks (#4 or #5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are a few players in the Utility sector that have the right combination of elements to post an earnings beat this quarter.
Spark Energy Inc. is expected to report fourth-quarter 2016 earnings on Mar 9. It has an Earnings ESP of +14.43% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aqua America Inc. has an Earnings ESP of +3.45% and a Zacks Rank #3. It is expected to report fourth-quarter earnings on Feb 22.
Pinnacle West Capital Corporation. (PNW - Free Report) has an Earnings ESP of +2.04% and a Zacks Rank #2. It is slated to report fourth-quarter earnings on Feb 24.
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In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>