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Aqua America's (WTR) Q2 Earnings In Line, Revenues Miss

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Water utility, Aqua America Inc. (WTR - Free Report) reported second-quarter 2017 earnings per share of 34 cents, on par with the Zacks Consensus Estimate and ahead of the year-ago quarter’s earnings of 33 cents by a penny.

Total Revenue

Second-quarter revenues of $203.4 million lagged the Zacks Consensus Estimate of $210 million by 3.1% and also missed the year-ago quarter figure of $203.9 million marginally by 0.2%.

Highlights of the Release

Year to date, Aqua America's state subsidiaries in Indiana, Illinois, New Jersey, North Carolina and Ohio have received rate awards or infrastructure surcharges totaling $11.1 million.  In addition, the company currently has rate proceedings pending in Illinois and Virginia for $14.0 million.

Consolidated operations and maintenance expenses were $70.9 million for second-quarter 2017, compared with $73.9 million in the year-ago quarter. The year-over-year decline was due to reduction in employee-related costs and lower production expenses.

Interest expenses increased 6.5% to $21.4 million from $20.1 million in the year-ago quarter.

Aqua America, Inc. Price, Consensus and EPS Surprise

 

Aqua America, Inc. Price, Consensus and EPS Surprise | Aqua America, Inc. Quote

 

Financial Highlights

Current assets were $138.1 million as of Jun 30, 2017, up from $128.7 million as of Dec 31, 2016.

Long-term debt was $1,822.6 million as of Jun 30, 2017, higher than $1,737.6 million as of Dec 31, 2016.

Guidance

Aqua America reiterated its 2017 earnings guidance in the range of $1.34–$1.39 per diluted share. It expects customer base to expand 1.5–2% in 2017.

The company also reaffirms its 2017 capital investment budget of $450 million. This is part of its planned investment of nearly $1.2 billion during the 2017–2019 time period.

Our View

Aqua America’s earnings were in line with expectations. The rate hikes already received will enable it to continue with its infrastructural strengthening initiatives.

The company aims to increase its customer level by 1.5–2% in 2017 through strategic acquisitions and organic initiatives. It has already added 1,000 customers to its existing base during the first half of 2017.

Aqua America currently has a Zacks Rank #4 (Sell).
 
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

American States Water Company (AWR - Free Report) reported second-quarter 2017 earnings of 62 cents per share, beating the Zacks Consensus Estimate of 45 cents by 37.8%.

American Water Works Company’s (AWK - Free Report) second-quarter 2017 earnings per share of 73 cents lagged the Zacks Consensus Estimate of 80 cents by 8.8%.

California Water Service Group (CWT - Free Report) reported second-quarter 2017 earnings of 39 cents per share, beating the Zacks Consensus Estimate of 31 cents by 25.8%.

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