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Why Is Consolidated Water (CWCO) Up 6.6% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Consolidated Water Co. Ltd. (CWCO - Free Report) . Shares have added about 6.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Q4 Earnings Flat, Sales Rise Y/Y
Consolidated Water Co. reported fourth-quarter 2016 earnings of $0.11 per share, in line with the year-ago quarter figure.
In 2016, the company reported earnings of $0.27 per share, down 47.1% from the year-ago number of $0.51.
Total Revenue
In the quarter under review, the company’s total revenue was $14.1 million, missing the Zacks Consensus Estimate of $15 million by 6%. However, reported revenues were higher than the year-ago tally of $13.4 million by 5.2%.
During 2016, Consolidated Water reported total revenue of $57.9 million, which missed the Zacks Consensus Estimate of $58.9 million by 1.7%. Nevertheless, reported revenues were higher than the year-ago tally of $57.1 million by 1.4%.
Segment Details
Retail Water Operations revenues in 2016 were up 1.1% year over year to $23.5 million. Volume of water sold in 2016 by the Cayman retail operations were up 12% from the 2015 level. However, the decline in energy costs and adjustment of the Cayman retail base rates under the company's retail license as well as decrease in sales for CW-Bali partially offset this volume increase.
Bulk Water Operations revenues in 2016 were down 6.9% year over year to $29.6 million due to lower contribution from the Bahamas and Cayman operations.
Services Operations revenues in 2016 of $4.7 million were up significantly from the year-ago level of $2 million. The upside was driven by revenues from Aerex, which was acquired in the first quarter of 2016.
Highlights of the Release
In 2016, cost of revenues decreased 0.5% year over year to $33.6 million, mainly due to lower cost of revenues from Retail and Bulk Water Operations, partially offset by higher cost of Services revenues.
Consolidated Water’s 2016 gross profit was $24.3 million, up 4% from the prior-year level. Moreover, the company incurred general and administrative expenses of $18.7 million, up 25.9% primarily due to $2.3 million expenses related to Aerex and an increase in project development expenses incurred by the company's Mexican subsidiary, N.S.C. Agua S.A. de C.V.
Financial Update
As of Dec 31, 2016, Consolidated Water’s cash and cash equivalents were $39.3 million, down from $44.8 million as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There have been two downward revisions in the last two months. In the past month, the consensus estimate has shifted lower by 5.6% due to these changes.
At this time, Consolidated Water.'s stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Charting athe same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Zacks' style scores indicate that the company's stock is suitable for growth, value and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.
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Why Is Consolidated Water (CWCO) Up 6.6% Since the Last Earnings Report?
A month has gone by since the last earnings report for Consolidated Water Co. Ltd. (CWCO - Free Report) . Shares have added about 6.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Q4 Earnings Flat, Sales Rise Y/Y
Consolidated Water Co. reported fourth-quarter 2016 earnings of $0.11 per share, in line with the year-ago quarter figure.
In 2016, the company reported earnings of $0.27 per share, down 47.1% from the year-ago number of $0.51.
Total Revenue
In the quarter under review, the company’s total revenue was $14.1 million, missing the Zacks Consensus Estimate of $15 million by 6%. However, reported revenues were higher than the year-ago tally of $13.4 million by 5.2%.
During 2016, Consolidated Water reported total revenue of $57.9 million, which missed the Zacks Consensus Estimate of $58.9 million by 1.7%. Nevertheless, reported revenues were higher than the year-ago tally of $57.1 million by 1.4%.
Segment Details
Retail Water Operations revenues in 2016 were up 1.1% year over year to $23.5 million. Volume of water sold in 2016 by the Cayman retail operations were up 12% from the 2015 level. However, the decline in energy costs and adjustment of the Cayman retail base rates under the company's retail license as well as decrease in sales for CW-Bali partially offset this volume increase.
Bulk Water Operations revenues in 2016 were down 6.9% year over year to $29.6 million due to lower contribution from the Bahamas and Cayman operations.
Services Operations revenues in 2016 of $4.7 million were up significantly from the year-ago level of $2 million. The upside was driven by revenues from Aerex, which was acquired in the first quarter of 2016.
Highlights of the Release
In 2016, cost of revenues decreased 0.5% year over year to $33.6 million, mainly due to lower cost of revenues from Retail and Bulk Water Operations, partially offset by higher cost of Services revenues.
Consolidated Water’s 2016 gross profit was $24.3 million, up 4% from the prior-year level. Moreover, the company incurred general and administrative expenses of $18.7 million, up 25.9% primarily due to $2.3 million expenses related to Aerex and an increase in project development expenses incurred by the company's Mexican subsidiary, N.S.C. Agua S.A. de C.V.
Financial Update
As of Dec 31, 2016, Consolidated Water’s cash and cash equivalents were $39.3 million, down from $44.8 million as of Dec 31, 2015.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There have been two downward revisions in the last two months. In the past month, the consensus estimate has shifted lower by 5.6% due to these changes.
Consolidated Water Co. Ltd. Price and Consensus
Consolidated Water Co. Ltd. Price and Consensus | Consolidated Water Co. Ltd. Quote
VGM Scores
At this time, Consolidated Water.'s stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Charting athe same path, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% 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.
Zacks' style scores indicate that the company's stock is suitable for growth, value and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #4 (Sell). We are looking for a below average return from the stock in the next few months.