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Why Is American Water Works (AWK) Up 3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for American Water Works (AWK - Free Report) . Shares have added nearly 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 drivers.
American Water Works Beats on Q4 Earnings Estimates
Water utility, American Water Works Company’s fourth-quarter 2016 earnings per share of $0.57 per share beat the Zacks Consensus Estimate by $0.01. Earnings were up 3.6% compared with the year-ago figure.
The increase in earnings can be attributable to higher earnings at the Regulated businesses and Market-based businesses segments. Market-based businesses benefited from price redeterminations in the Military Services Group.
2016 earnings per share came in at $2.84 on par with the Zacks Consensus Estimate of $2.84 per share. Full-year earnings of American Water Works were near the upper end of the guidance range of $2.81–$2.86 per share. Earnings were 7.6 % higher than the 2015 earnings of $2.64 per share.
Total Revenue
Fourth-quarter total revenue of $802 million lagged the Zacks Consensus Estimate of $810.8 million by 1.1%. However, reported revenues were, up 2.4% year over year.
Revenues for the full-year 2016 came in at $3.3 billion in line with Zacks Consensus Estimate. However, yearly revenues were 4.5% higher than the year-ago figure of $3.1 billion.
Highlights of the Release
Total operating expenses in the reported quarter inched up 0.5% to $554 million, primarily due to increase in general taxes.
Operating income in the reported quarter were $248 million up 6.9% year over year.
In 2016, capital expenditures increased $151 million or 13.0% to $1.31 billion primarily due to the continued investment across the majority of its infrastructure categories.
Segment Details
Regulated businesses’ net income was $98 million, compared with $96 million for in year-ago period. Market-based businesses’ net income was $13 million, compared with $11 million a year ago. Financial Highlights
Cash and cash equivalents were $75 million as of Dec 31, 2016, up from $45 million as of Dec 31, 2015.
Long-term debt was $5,759 million as of Dec 31, 2016, lower than $5,874 million as of Dec 31, 2015. Guidance
American Water Works expects 2017 earnings guidance from continuing operations to the range of $2.98–$3.08 per diluted share.
Ageing infrastructure is a pressing problem for most water utilities. For 2017, American Water Works’ capital investment budget is $1.5 billion. The company aims to invest $6.7–$7.3 billion from 2017 through 2021.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter.
At this time, American Water Works's stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. Following the exact same course, the stock was allocated also 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.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is American Water Works (AWK) Up 3% Since the Last Earnings Report?
A month has gone by since the last earnings report for American Water Works (AWK - Free Report) . Shares have added nearly 3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 drivers.
American Water Works Beats on Q4 Earnings Estimates
Water utility, American Water Works Company’s fourth-quarter 2016 earnings per share of $0.57 per share beat the Zacks Consensus Estimate by $0.01. Earnings were up 3.6% compared with the year-ago figure.
The increase in earnings can be attributable to higher earnings at the Regulated businesses and Market-based businesses segments. Market-based businesses benefited from price redeterminations in the Military Services Group.
2016 earnings per share came in at $2.84 on par with the Zacks Consensus Estimate of $2.84 per share. Full-year earnings of American Water Works were near the upper end of the guidance range of $2.81–$2.86 per share. Earnings were 7.6 % higher than the 2015 earnings of $2.64 per share.
Total Revenue
Fourth-quarter total revenue of $802 million lagged the Zacks Consensus Estimate of $810.8 million by 1.1%. However, reported revenues were, up 2.4% year over year.
Revenues for the full-year 2016 came in at $3.3 billion in line with Zacks Consensus Estimate. However, yearly revenues were 4.5% higher than the year-ago figure of $3.1 billion.
Highlights of the Release
Total operating expenses in the reported quarter inched up 0.5% to $554 million, primarily due to increase in general taxes.
Operating income in the reported quarter were $248 million up 6.9% year over year.
In 2016, capital expenditures increased $151 million or 13.0% to $1.31 billion primarily due to the continued investment across the majority of its infrastructure categories.
Segment Details
Regulated businesses’ net income was $98 million, compared with $96 million for in year-ago period.
Market-based businesses’ net income was $13 million, compared with $11 million a year ago.
Financial Highlights
Cash and cash equivalents were $75 million as of Dec 31, 2016, up from $45 million as of Dec 31, 2015.
Long-term debt was $5,759 million as of Dec 31, 2016, lower than $5,874 million as of Dec 31, 2015.
Guidance
American Water Works expects 2017 earnings guidance from continuing operations to the range of $2.98–$3.08 per diluted share.
Ageing infrastructure is a pressing problem for most water utilities. For 2017, American Water Works’ capital investment budget is $1.5 billion. The company aims to invest $6.7–$7.3 billion from 2017 through 2021.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There has been one revision lower for the current quarter.
American Water Works Price and Consensus
American Water Works Price and Consensus | American Water Works Quote
VGM Scores
At this time, American Water Works's stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. Following the exact same course, the stock was allocated also 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.
Zacks' style scores indicate that the company's stock is suitable for value and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.