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American Water Works (AWK) Q1 Earnings Miss, Revenues Beat

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American Water Works Company (AWK - Free Report) posted first-quarter 2019 earnings per share of 61 cents, which lagged the Zacks Consensus Estimate by 3.2%.  However, the bottom line improved 3.4% year over year on the back of contribution generated from infrastructure investment, acquisitions and organic growth.

The company reported GAAP earnings of 62 cents compared with 59 cents in the year-ago quarter.

Total Revenues
 
Total revenues of $813 million beat the Zacks Consensus Estimate of $803 million by 1.2% and increased 6.8% from the year-ago figure of $761 million.

Highlights of the Release
 
Total operating expenses in the quarter were $575 million, up 5.7% from the year-ago period. The increase was primarily led by higher operation and maintenance expenses.

Operating income was $238 million, up 9.7% year over year.

Segment Details
 
Regulated businesses’ net income was $107 million compared with $104 million in the year-ago quarter. Regulated businesses added 7,700 customers in first quarter through acquisitions and organic growth. The new rates and rising demand from expanding customer base boosted quarterly earnings from this segment.

Market-Based businesses’ net income was $20 million compared with $12 million in the year-ago quarter. The increase was primarily driven by Homeowner Services Group acquisition of Pivotal and customer additions under new partnerships.
 
Financial Highlights

Cash and cash equivalents were $63 million as of Mar 31, 2019, up 51.5% from $130 million on Dec 31, 2018.

Long-term debt was $7,568 million as of Mar 31, 2019, marginally lower than $7,576 million as of December 2018 end.

Guidance

American Water Works has affirmed 2019 earnings guidance in the range of $3.54-$3.64 per share.

It plans to invest $1.7-$1.8 billion in 2019 for capital expenditures and acquisitions.

The company expects long-term EPS compound annual growth rate in top half of 7-10% range, anchored off 2017 EPS.

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 Water Utility Releases

American States Water Co. (AWR - Free Report) is set to release first-quarter 2019 earnings on May 6. The Zacks Consensus Estimate for the quarter is pegged at 36 cents.

Connecticut Water Service, Inc. (CTWS - Free Report) is slated to release first-quarter 2019 earnings on May 8. The Zacks Consensus Estimate for the quarter to be reported is pegged at 20 cents.

Consolidated Water Works Company (CWCO - Free Report) is set to release first-quarter 2019 earnings on May 13. The Zacks Consensus Estimate for the quarter to be reported is pegged at 19 cents.

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