A month has gone by since the last earnings report for Aqua America, Inc. (NYSE:WTR) . Shares have lost about 1.8% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is WTR due for a breakout? 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.
Aqua America Q1 Earnings In Line, Sales Lag Estimates
Aqua America reported first-quarter 2018 earnings per share of 29 cents, in line with the Zacks Consensus Estimate. The reported earnings figure was a penny higher than 28 cents registered in the year-ago quarter.
The year-over-year growth in earnings was due to organic improvement, lower income tax expenses and increase in water-consumption boosting earnings.
Total Revenues
First-quarter revenues of $194.4 million lagged the Zacks Consensus Estimate of $199 million by 2.3%. However, revenues were up 3.5% year over year. The year-over-year improvement in total revenues was due to the increase in rates, and surcharge and regulated revenues, as well as consumption growth.
Highlights of the Release
The company continues to expand its operation through strategic acquisitions. During the first quarter, Aqua America acquired three water and wastewater systems resulting in 448 customer connection additions, while organic growth added another 1,811 customers.
Year to date, Aqua America's state subsidiaries in Indiana, Illinois, New Jersey, North Carolina, Texas, Pennsylvania and Ohio have received rate awards or infrastructure surcharges amounting to $23.6 million. In addition, the company currently has rate proceedings pending in Indiana, North Carolina, Virginia and Ohio worth $8.6 million.
Operation and maintenance expenses increased 8.8% year over year to $73.9 million. The year-over-year increase due to higher overtime and repair costs related to severe winter weather was marginally offset by lower costs of production and market-based activities.
Interest expenses increased 10.3% to $23.5 million from $21.3 million in the year-ago quarter.
Financial Highlights
Current assets were $124.1 million as of Mar 31, 2018, down from $131.3 million as of Dec 31, 2017.
Long-term debt was $2,063.1 million as of Mar 31, 2018, higher than $2,007.7 million as of Dec 31, 2017.
Guidance
Aqua America reiterated its 2018 earnings in the range of $1.37-$1.42 per share. It expects customer base to expand 2-3% in 2018.
The company also plans to invest $500 million in 2018. This is part of the investment plan of nearly $1.4 billion through 2020.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Aqua America, Inc. Price and Consensus
VGM Scores
Currently, WTR has a subpar Growth Score of D, however its Momentum is doing a lot better with a B. However, the stock was also 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
WTR has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Aqua America, Inc. (WTR): Free Stock Analysis Report
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