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Aqua America (WTR) Beats on Q3 Earnings, 2016 View Intact
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Water utility Aqua America Inc.’s third-quarter earnings per share of 41 cents outpaced the Zacks Consensus Estimate of 39 cents by 5.1%. Reported earnings also improved 7.9% from the year-ago figure of 38 cents.
The year-over-year increase in earnings was attributable to higher contributions from the Regulated business segment and proper management of expenses.
Third-quarter revenues of $227 million surpassed the Zacks Consensus Estimate of $223 million by 1.8% and increased 2.7% year over year.
Higher consumption, rates and surcharges, regulated growth, and other factors added nearly $9.2 million to regulated revenues. However, lower contributions from market-based activities offset the upside by $3.7 million.
Highlights of the Release
Year to date, Aqua America’s state subsidiaries in Illinois, North Carolina, Ohio, Texas and Virginia have received rate awards or infrastructure surcharges, resulting in an annual increase of $5.5 million in revenues.
Total operating expenses in the reported quarter increased 1.6% to $79.8 million. Reduced market-based activities and lower production costs of $2.7 million helped offset the increase in operating expenses.
So far this year, Aqua America has added nearly 5,300 customers to its existing base through strategic acquisitions.
Interest expenses increased 4.8% to $20.2 million from $19.2 million in the year-ago quarter.
Current assets were $141.4 million as of Sep 30, 2016, up from $128.4 million as of Dec 31, 2015.
Long-term debt was $1,726.5 million as of Sep 30, 2016, marginally higher than $1,720.5 million as of Dec 31, 2015.
The company invested $270 million in the first nine months of the year to improve its infrastructure.
Guidance
Aqua America reiterated its 2016 earnings guidance in the range of $1.30 to $1.35 per diluted share. The company expects its customer base to expand by 1.5% to 2% in 2016.
Ageing infrastructure is a pressing concern for most water utilities. For 2016, the company’s capital investment budget is $350 million. This is part of its planned investment of nearly $1.1 billion during the 2016–2018 period.
Peer Releases
SJW Corp. (SJW - Free Report) reported third-quarter 2016 adjusted earnings of 92 cents per share, surpassing the Zacks Consensus Estimate of 45 cents by 104.44%.
California Water Service Group (CWT - Free Report) reported third-quarter earnings per share of 48 cents per share, missing the Zacks Consensus Estimate of 57 cents by 15.79%.
An Upcoming Peer Release
Consolidated Water Co. Ltd. (CWCO - Free Report) is expected to report third-quarter results on Nov 14. The Zacks Consensus Estimate stands at 16 cents.
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Aqua America (WTR) Beats on Q3 Earnings, 2016 View Intact
Water utility Aqua America Inc.’s third-quarter earnings per share of 41 cents outpaced the Zacks Consensus Estimate of 39 cents by 5.1%. Reported earnings also improved 7.9% from the year-ago figure of 38 cents.
The year-over-year increase in earnings was attributable to higher contributions from the Regulated business segment and proper management of expenses.
Total Revenue
Third-quarter revenues of $227 million surpassed the Zacks Consensus Estimate of $223 million by 1.8% and increased 2.7% year over year.
Higher consumption, rates and surcharges, regulated growth, and other factors added nearly $9.2 million to regulated revenues. However, lower contributions from market-based activities offset the upside by $3.7 million.
Highlights of the Release
Year to date, Aqua America’s state subsidiaries in Illinois, North Carolina, Ohio, Texas and Virginia have received rate awards or infrastructure surcharges, resulting in an annual increase of $5.5 million in revenues.
Total operating expenses in the reported quarter increased 1.6% to $79.8 million. Reduced market-based activities and lower production costs of $2.7 million helped offset the increase in operating expenses.
So far this year, Aqua America has added nearly 5,300 customers to its existing base through strategic acquisitions.
Interest expenses increased 4.8% to $20.2 million from $19.2 million in the year-ago quarter.
AQUA AMER INC Price, Consensus and EPS Surprise
AQUA AMER INC Price, Consensus and EPS Surprise | AQUA AMER INC Quote
Financial Highlights
Current assets were $141.4 million as of Sep 30, 2016, up from $128.4 million as of Dec 31, 2015.
Long-term debt was $1,726.5 million as of Sep 30, 2016, marginally higher than $1,720.5 million as of Dec 31, 2015.
The company invested $270 million in the first nine months of the year to improve its infrastructure.
Guidance
Aqua America reiterated its 2016 earnings guidance in the range of $1.30 to $1.35 per diluted share. The company expects its customer base to expand by 1.5% to 2% in 2016.
Ageing infrastructure is a pressing concern for most water utilities. For 2016, the company’s capital investment budget is $350 million. This is part of its planned investment of nearly $1.1 billion during the 2016–2018 period.
Peer Releases
SJW Corp. (SJW - Free Report) reported third-quarter 2016 adjusted earnings of 92 cents per share, surpassing the Zacks Consensus Estimate of 45 cents by 104.44%.
California Water Service Group (CWT - Free Report) reported third-quarter earnings per share of 48 cents per share, missing the Zacks Consensus Estimate of 57 cents by 15.79%.
An Upcoming Peer Release
Consolidated Water Co. Ltd. (CWCO - Free Report) is expected to report third-quarter results on Nov 14. The Zacks Consensus Estimate stands at 16 cents.
Zacks Rank
Aqua America carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>