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American Water (AWK) Q3 Earnings & Revenues Beat Estimates

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American Water Works Company (AWK - Free Report) posted third-quarter 2018 earnings per share of $1.20, which beat the Zacks Consensus Estimate of $1.16 by 3.5%. The figure also improved 11.1% year over year. The uptick was supported by solid growth in Regulated and Market-Based businesses during the third quarter.

The company reported GAAP earnings of $1.04 compared with $1.13 in the year-ago quarter.

Total Revenues
 

Total revenues of $976 million surpassed the Zacks Consensus Estimate of $956 million and the year-ago figure of $936 million by 2.1% and 4.3%, respectively.

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 $641 million, up 27.2% from the year-ago quarter. The increase was primarily led by higher general taxes, along with greater operation and maintenance expenses compared with the year-ago levels.

Operating income was $335 million, down 22.4% year over year.

Segment Details
 
Regulated businesses’ net income was $213 million, up 7% from $199 million in the year-ago quarter. Regulated businesses added 16,500 customers on a year-to-date basis through acquisitions and organic growth. The company is looking forward to add another 56,000 customers through pending acquisitions.

Market-Based businesses’ net income was $23 million compared with $14 million in the year-ago quarter. The year-over-year increase can be attributed to growth in Homeowner Services Group, along with lower-than-expected Pivotal Home Solutions integration expenses during the quarter

Financial Highlights

Cash and cash equivalents were $86 million as of Sep 30, 2018, up 56.4% from Dec 31, 2017 level.
 
Long-term debt was $7,570 million as of Sep 30, 2018, higher than $6,490 million on Dec 31, 2017.

In the first nine months of 2018, the company made capital investments of $1.5 billion.

Guidance

American Water Works narrowed the high end of 2018 earnings per share guided range to $3.27-$3.32 per share from $3.22-$3.32 projected earlier.
 
American Water plans to invest $2.0-$2.1 billion, including the acquisition of Pivotal Home Solutions in 2018.

Zacks Rank

American Water Works currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Aqua America Inc. (WTR - Free Report) is expected to report third-quarter 2018 results on Nov 5. The Zacks Consensus Estimate for earnings is pegged at 43 cents.

American States Water Company (AWR - Free Report) is scheduled to report third-quarter 2018 results on Nov 5. The Zacks Consensus Estimate for earnings is pegged at 60 cents.

Consolidated Water Company Ltd (CWCO - Free Report) is likely to report third-quarter 2018 results on Nov 8. The Zacks Consensus Estimate for earnings is pegged at 15 cents.

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