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Why Is American States Water (AWR) Up 20.3% 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 20.3% 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 catalysts.

American States Water's Q2 Earnings Beat Estimates

American States Water reported second-quarter 2019 operating earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 23%. The bottom line surged 45.4% from 44 cents registered in the year-ago quarter. Earnings during the quarter benefited from the new rates introduced in the service territories of Golden State Water Company.

Total Revenues

Operating revenues amounted to $124.6 million, which outpaced the Zacks Consensus Estimate of $112 million by 11.3%. The top line also jumped 16.6% from $106.9 million in the prior-year quarter. The upside can be primarily attributed to higher revenues in the Contracted services and Water segments.

Operational Update

In the quarter under review, American States Water’s total operating expenses were $85.2 million, up 4.8% year over year.

Operating income was $39.4 million, up 53.9%.

Interest expenses were $6.3 million, up 3.3%. Also, interest income totaled $0.9 million, up 50%.

Segment Details

At the Water segment, earnings were 51 cents, up from 35 cents in the prior-year quarter.

Earnings in the Electric segment came in at 1 cent, down from 2 cents.

At the Contracted Services segment, earnings totaled 12 cents, which rallied 100% from the year-ago quarter.

Financial Update

As of Jun 30, 2019, American States Water’s cash and cash equivalents were $1.5 million compared with $7.1 million as of Dec 31, 2018.

As of Jun 30, 2019, the company’s long-term debts were $281 million, in line with the debt as of Dec 31, 2018.


 

How Have Estimates Been Moving Since Then?

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

VGM Scores

At this time, American States Water has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, 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 broadly trending downward for the stock, and the magnitude of this revision has been net zero. 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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