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Consolidated Water (CWCO) Down 5.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Consolidated Water (CWCO - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Consolidated Water due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Consolidated Water’s Q2 Earnings & Sales Lag Estimates
Consolidated Water Co. Ltd. delivered second-quarter 2024 earnings per share of 26 cents, which lagged the Zacks Consensus Estimate of 34 cents by 23.5%. The bottom line also decreased 44.7% from last year’s 47 cents.
Total Revenues
The company’s total revenues for the quarter were $32 million, which missed the Zacks Consensus Estimate of $37 million by 12.5%. The top line declined 27.3% from the year-ago quarter’s figure of $44 million.
Segment Details
Retail revenues totaled $8.18 million, up 8.1% from $7.57 million in the year-ago quarter. The rise was due to an 8% increase in the volume of water sold.
Bulk revenues amounted to $8.44 million, down 0.5% from $8.48 million in the prior year. The decrease in bulk segment revenues was due to a decline in energy costs for CW-Bahamas. This reduced the energy pass-through component of CW-Bahamas’ rates.
Manufacturing revenues for the quarter totaled $3.9 million, down 3.9% from $4.08 million in the previous year.
Services revenues amounted to $11.9 million, down 50.6% from $24.1 million in the last year. The decrease in services segment revenues was due to a $16.5 million decline in plant construction revenues.
Highlights of the Release
General and administrative expenses increased nearly 10.4% to $6.6 million.
Net income from continuing operations amounted to $11.5 million compared with $11.9 million in the year-ago quarter.
The volume of retail water sold in the company’s utility service area in Grand Cayman increased 10% year over year. The company completed the construction and commissioning of the new 2.6 million gallons per day Red Gate desalination plant for the Water Authority of the Cayman Islands. It began operating the facility under a 10-year operations and maintenance agreement.
Financial Highlights
Cash and cash equivalents totaled $96.7 million as of Jun 30, 2024, compared with $42.6 million as of Dec 31, 2023. Working capital amounted to $131.2 million as of the same date.
Total long-term debt was $0.15 million as of Jun 30, 2024, lower than $0.19 million at 2023-end.
Cash flow from operating activities in the first half of 2024 totaled $26.9 million compared with $4.5 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Consolidated Water has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Consolidated Water has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Consolidated Water belongs to the Zacks Utility - Water Supply industry. Another stock from the same industry, American Water Works (AWK - Free Report) , has gained 3.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
American Water Works reported revenues of $1.15 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $1.42 for the same period compares with $1.44 a year ago.
American Water Works is expected to post earnings of $1.83 per share for the current quarter, representing a year-over-year change of +10.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
American Water Works has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Consolidated Water (CWCO) Down 5.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Consolidated Water (CWCO - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Consolidated Water due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Consolidated Water’s Q2 Earnings & Sales Lag Estimates
Consolidated Water Co. Ltd. delivered second-quarter 2024 earnings per share of 26 cents, which lagged the Zacks Consensus Estimate of 34 cents by 23.5%. The bottom line also decreased 44.7% from last year’s 47 cents.
Total Revenues
The company’s total revenues for the quarter were $32 million, which missed the Zacks Consensus Estimate of $37 million by 12.5%. The top line declined 27.3% from the year-ago quarter’s figure of $44 million.
Segment Details
Retail revenues totaled $8.18 million, up 8.1% from $7.57 million in the year-ago quarter. The rise was due to an 8% increase in the volume of water sold.
Bulk revenues amounted to $8.44 million, down 0.5% from $8.48 million in the prior year. The decrease in bulk segment revenues was due to a decline in energy costs for CW-Bahamas. This reduced the energy pass-through component of CW-Bahamas’ rates.
Manufacturing revenues for the quarter totaled $3.9 million, down 3.9% from $4.08 million in the previous year.
Services revenues amounted to $11.9 million, down 50.6% from $24.1 million in the last year. The decrease in services segment revenues was due to a $16.5 million decline in plant construction revenues.
Highlights of the Release
General and administrative expenses increased nearly 10.4% to $6.6 million.
Net income from continuing operations amounted to $11.5 million compared with $11.9 million in the year-ago quarter.
The volume of retail water sold in the company’s utility service area in Grand Cayman increased 10% year over year. The company completed the construction and commissioning of the new 2.6 million gallons per day Red Gate desalination plant for the Water Authority of the Cayman Islands. It began operating the facility under a 10-year operations and maintenance agreement.
Financial Highlights
Cash and cash equivalents totaled $96.7 million as of Jun 30, 2024, compared with $42.6 million as of Dec 31, 2023. Working capital amounted to $131.2 million as of the same date.
Total long-term debt was $0.15 million as of Jun 30, 2024, lower than $0.19 million at 2023-end.
Cash flow from operating activities in the first half of 2024 totaled $26.9 million compared with $4.5 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Consolidated Water has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Consolidated Water has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Consolidated Water belongs to the Zacks Utility - Water Supply industry. Another stock from the same industry, American Water Works (AWK - Free Report) , has gained 3.6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
American Water Works reported revenues of $1.15 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $1.42 for the same period compares with $1.44 a year ago.
American Water Works is expected to post earnings of $1.83 per share for the current quarter, representing a year-over-year change of +10.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
American Water Works has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.