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American Water Works (AWK) Q1 Earnings Beat, Sales Down Y/Y

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American Water Works Company (AWK - Free Report) posted first-quarter 2018 earnings per share of 59 cents, which beat the Zacks Consensus Estimate of 55 cents by 7.3%. Earnings improved 13.5% from the year-ago quarter.

The improvement came on the back of growth in Regulated Businesses as well as The Market-Based Businesses.

Total Revenues
 
Total revenues of $761 million missed the Zacks Consensus Estimate of $787 million by 3.3%. However, reported revenues improved 0.7% year over year.

American Water Works Price, Consensus and EPS Surprise

 

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

 Highlights of the Release
 
Total operating expenses in the quarter were $544 million, up 3.4% from the year-ago quarter. The increase was primarily led by higher operation & maintenance and higher depreciation & amortization expenses compared with the year-ago quarter.

Operating income was $217 million, down 5.7% year over year.
 
Segment Details
 

Regulated Businesses’ net income was $104 million, up 10.6% from $94 million in the year-ago quarter.

Market-Based Businesses’ net income was $12 million compared with $7 million in the year-ago quarter. The year-over-year increase can be attributed to growth in the Homeowner Services Group through customer addition and cost management and the federal income tax rate cut.

Financial Highlights
 
Cash and cash equivalents were $55 million as of Mar 31, 2018, in line with the Dec 31, 2017 level.
 
Long-term debt was $11,854 million as of Mar 31, 2018, lower than $11,883 million as of Dec 31, 2017.

The company made capital investments of $343 million in the first quarter, including $302 million to improve Regulated Businesses infrastructure to provide safe, clean and reliable service and more than $8 million for regulated acquisitions.

Guidance
 
American Water Works reaffirmed the 2018 earnings per share guidance at the range of $3.22-$3.32.

The company announced a hike in dividend payment of 9.6% to 45.5 cents per share. The dividend is payable on Jun 1, 2018, to shareholders of record as of May 11.

Zacks Rank

American Water Works carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Peer Releases

American States Water Company (AWR - Free Report) , is expected to report first-quarter 2018 results on May 7. The Zacks Consensus Estimate for earnings is pegged at 34 cents.

Consolidated Water Company Ltd. (CWCO - Free Report) , is likely to report first-quarter 2018 results on May 9. The Zacks Consensus Estimate for earnings stands at 18 cents.

Aqua America Inc. (WTR - Free Report) is expected to report first-quarter 2018 results on May 8 .The Zacks Consensus Estimate for earnings is pinned at 29 cents.

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