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American Water Works (AWK) Q3 Earnings: What's in Store?

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American Water Works Company (AWK - Free Report) is scheduled to release third-quarter 2018 results on Oct 31, after market close. In the last reported quarter, the company delivered a positive earnings surprise of 2.47%.

Let’s see how things are shaping up for this water utility prior to the earnings announcement.

Factors to Consider

American Water Works consistently makes investments toward infrastructure upgrade, water treatment, improvement of water mains and wastewater systems. The company’s regulated business reflects strong growth. It continues to add customers through acquisitions and organic growth.

The company is trying to lower O&M expenses through operational efficiency. The new water rates, effective since Jan 1, are expected to boost the company's annual revenues by $110 million. The company is trying to optimize Market-based businesses through acquisitions and divestments. These factors are expected to have a positive impact on third-quarter earnings.

The Zacks Consensus Estimate for third-quarter revenues and earnings per share is pegged at  $936  million and $1.16, which reflects year-over-year growth of 2.1%  and 7.41%, respectively.

Earnings Whispers

A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat estimates. However, American Water Works does not have the required combination, which is elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Water Works currently has a Zacks Rank #3. The company’s favorable Zacks Rank when combined with the neutral ESP lowers the possibility of a beat.

American Water Works Price and EPS Surprise

 

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

 

However, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Utility Stocks With Favorable Combination

Dominion Energy Inc (D - Free Report) is expected to release third-quarter results on Nov 1. It has an Earnings ESP of +1.39% and a Zacks Rank #2.

FirstEnergy Corporation (FE - Free Report) is expected to release third-quarter results on Oct 25. It has an Earnings ESP of +0.78% and a Zacks Rank #2.

AquaVenture Holdings Ltd. (WAAS - Free Report) is expected to release third-quarter results on Nov 7. It has an Earnings ESP of +19.05% and a Zacks Rank #3.

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