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American States Water (AWR) Up 2.8% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for American States Water (AWR - Free Report) . Shares have added about 2.8% in that time frame, outperforming 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 its most recent earnings report in order to get a better handle on the important drivers.

American States Water Q3 Earnings Top, Revenues Lag

American States Water Company delivered third-quarter 2018 earnings of 62 cents per share, surpassing the Zacks Consensus Estimate of 60 cents by 3.3%. Further, the bottom-line figure improved 8.8% from 57 cents in the year-ago period.

Total Revenues

The company’s operating revenues were $124.2 million, missing the Zacks Consensus Estimate of $128 million by 3%. The top line also dipped 0.2% year over year. Total revenues decreased primarily due to lower revenues generated by the Water segment, which was down by nearly 4.6%.

Operational Update

In the quarter under review, American States Water’s total operating expenses were $90.2 million, up 5% year over year.

Interest expenses were $6 million, up 3% year over year. Similarly, interest income was $0.6 million, soaring 100% year over year.

Segment Details

Earnings at Water segment were 47 cents, up 6.8% from 44 cents year over year.

Earnings at Electric segment were 2 cents, down 33.3% year over year.

Earnings at Contracted Services segments were 13 cents, up 30% compared with the year-ago period.

Financial Update

As of Sep 30, 2018, American States Water’s cash and cash equivalents were $1.98 million compared with $0.21 million as of Dec 31, 2017.

As of Sep 30, 2018, the company’s long-term debts were down at $281 million compared with $321 million as of Dec 31, 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, American States Water has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, American States Water has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.




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