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Why Is American States Water (AWR) Up 0.5% Since Last Earnings Report?

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A month has gone by since the last earnings report for American States Water (AWR - Free Report) . Shares have added about 0.5% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is American States Water 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.

American States Water (AWR - Free Report) Q2 Earnings Miss Estimates

American States Water delivered second-quarter 2018 earnings of 44 cents per share, missing the Zacks Consensus Estimate of 48 cents by 8.3%. Further, the bottom-line figure declined 29.1% year over year.

This year-over-year fall in earnings was due to decrease in construction revenues from the company’s Contracted Services segment.

Total Revenues

The company’s operating revenues of $106.9 million lagged the Zacks Consensus Estimate of $116 million by 7.8%. Overall, revenues dipped 5.6% year over year. This downside was primarily caused by lower revenues, generated by the Water and Contracted services segment.

Operational Update

In the quarter under review, American States Water’s total operating expenses were $81.3 million, up 14.2% year over year.

Interest expenses were $6.1 million, up 3.4% year over year. Interest income totaled $0.63 million, up 2.6% year over year.

Segment Details

The Water segment’s earnings were 35 cents, flat year over year.

The Electric segment generated earnings of 2 cents, flat year over year.

Earnings from the Contracted Services segment were 6 cents, down from 12 cents in the year-ago period.

Financial Update

As of Jun 30, 2018, American States Water’s cash and cash equivalents were $5.57 million compared with $0.21 million on Dec 31, 2017.

As of Jun 30, 2018, the company’s long-term debt was $281.1 million compared with $321 million on Dec 31, 2017.

Net cash provided by operating activities in the first six months of 2018 was $65.1 million, down from $75.5 million in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, American States Water has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, American States Water has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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