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Can American Water (AWK) Pull Off a Surprise in Q2 Earnings?

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American Water Works Company (AWK - Free Report) is scheduled to report second-quarter 2017 results after the market closes on Aug 2. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for the second quarter.

Factors to Consider

American Water continues to expand its operation through strategic acquisitions, which are going to extend its market reach and increase its customer base. Thanks to ongoing acquisitions and organic growth, the company has added nearly 16,700 customers to its existing base.

The new rates that are approved from January this year will increase its total revenue by $46.9 million annually. Military Service Group performance was below expectations due to lower capital upgrades and could be a headwind in the second quarter as well.

Earnings Whispers

Our proven model does not conclusively show that American Water 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. Unfortunately, that is not the case here, as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks ESP: American Water’s Earnings ESP is 0.00%, as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents.

American Water Works Price and EPS Surprise

 

 

American Water Works Price and EPS Surprise | American Water Works Quote

Zacks Rank: The company holds a Zacks Rank #2 (Buy), which increases the possibility of an earnings surprise. However, its 0.00% ESP makes a beat unlikely this season.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

American Water does not have the correct mix to come up with an earnings surprise this season. However, the following companies from the Zacks categorized Utility sector have the right combination of elements to post an earnings beat this quarter.

NiSource Inc. (NI - Free Report) has an Earnings ESP of +10.0% and a Zacks Rank #2. It is slated to report second-quarter 2017 earnings on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

ALLETE Inc. (ALE - Free Report) has an Earnings ESP of +5.36% and a Zacks Rank #2. It is slated to report second-quarter 2017 earnings on Aug 2.

IDAC ORP Inc. (IDA - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #2. It is slated to report second-quarter 2017 earnings on Aug 3.

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