A month has gone by since the last earnings report for Aqua America, Inc. . Shares have added about 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 the most recent earnings report in order to get a better handle on the important drivers.
Aqua America Misses Q4 Earnings, Issues '17 Guidance
Water utility, Aqua America Inc. reported fourth-quarter 2016 earnings per share of $0.28, lagging the Zacks Consensus Estimate of $0.29 by 3.4%. Further, reported earnings improved 75.0% from the year-ago figure of $0.16.
The year-over-year increase in earnings can be attributed to higher contributions from the higher water rates, and growth from the acquired water and waste-water assets of the company.
The full-year 2016 earnings were $1.32 on par with the Zacks Consensus Estimate of $1.32 per share. The earnings exceeded the 2015 figure by 15.8%. The full-year 2016 earnings were within the earnings guidance range of $1.30–$1.35 per diluted share.
Total Revenue
Fourth-quarter revenues of $196.8 million lagged the Zacks Consensus Estimate of $205 million by 4.61% and marginally missed the year-ago quarter figure of $197.1 million.
Higher consumption and customer growth in the regulated business along with rates and surcharges increased revenues by $4.8 million. However, lower revenue from the company’s sale of market-based activities and other factors offset the increase by $5 million.
The full-year 2016 total revenues were $819.9 million inching up 0.7% from $814.2 million reported in 2015. However, total revenues were 1.06% lower than the Zacks Consensus Estimate of $828.6 million.
Highlights of the Release
In 2016, 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 $5.6 million in revenues.
Consolidated operations and maintenance expenses were $77.6 million for fourth-quarter 2016, compared with $77.9 million in the year-ago quarter. Reduced market-based activities and lower production costs decreased operations and maintenance expenses by $4.8 million. Higher costs associated with employee-related expenses, regulated acquisitions and other factors offset the reduction in expenses by $4.5 million.
Aqua America has added nearly 7,000 customers to its existing base through strategic acquisitions. In addition to the organic growth, the customers of Aqua America increased by 1.6% or 15,300 new connections in 2016.
Interest expenses rose 4.1% to $20.5 million from $19.7 million in the year-ago quarter.
Financial Highlights
Current assets were $128.7 million as of Dec 31, 2016, up marginally from $128.4 million as of Dec 31, 2015.
Long-term debt was $1,737.6 million as of Dec 31, 2016, higher than $1,720.5 million as of Dec 31, 2015.
The company invested $383 million in 2016 to improve its infrastructure.
Guidance
Aqua America reiterated 2017 earnings guidance in the range of $1.34–1.39 per diluted share. The company expects customer base to expand by 1.5–2% in 2017.
For 2017, the company's capital investment budget is $450 million. This is part of its planned investment of nearly $1.2 billion during the 2017–2019 period.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Aqua America's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. Following the exact same course, the stock was allocated also 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.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Image: Bigstock
Why Is Aqua America (WTR) Up 3% Since the Last Earnings Report?
A month has gone by since the last earnings report for Aqua America, Inc. . Shares have added about 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 the most recent earnings report in order to get a better handle on the important drivers.
Aqua America Misses Q4 Earnings, Issues '17 Guidance
Water utility, Aqua America Inc. reported fourth-quarter 2016 earnings per share of $0.28, lagging the Zacks Consensus Estimate of $0.29 by 3.4%. Further, reported earnings improved 75.0% from the year-ago figure of $0.16.
The year-over-year increase in earnings can be attributed to higher contributions from the higher water rates, and growth from the acquired water and waste-water assets of the company.
The full-year 2016 earnings were $1.32 on par with the Zacks Consensus Estimate of $1.32 per share. The earnings exceeded the 2015 figure by 15.8%. The full-year 2016 earnings were within the earnings guidance range of $1.30–$1.35 per diluted share.
Total Revenue
Fourth-quarter revenues of $196.8 million lagged the Zacks Consensus Estimate of $205 million by 4.61% and marginally missed the year-ago quarter figure of $197.1 million.
Higher consumption and customer growth in the regulated business along with rates and surcharges increased revenues by $4.8 million. However, lower revenue from the company’s sale of market-based activities and other factors offset the increase by $5 million.
The full-year 2016 total revenues were $819.9 million inching up 0.7% from $814.2 million reported in 2015. However, total revenues were 1.06% lower than the Zacks Consensus Estimate of $828.6 million.
Highlights of the Release
In 2016, 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 $5.6 million in revenues.
Consolidated operations and maintenance expenses were $77.6 million for fourth-quarter 2016, compared with $77.9 million in the year-ago quarter. Reduced market-based activities and lower production costs decreased operations and maintenance expenses by $4.8 million. Higher costs associated with employee-related expenses, regulated acquisitions and other factors offset the reduction in expenses by $4.5 million.
Aqua America has added nearly 7,000 customers to its existing base through strategic acquisitions. In addition to the organic growth, the customers of Aqua America increased by 1.6% or 15,300 new connections in 2016.
Interest expenses rose 4.1% to $20.5 million from $19.7 million in the year-ago quarter.
Financial Highlights
Current assets were $128.7 million as of Dec 31, 2016, up marginally from $128.4 million as of Dec 31, 2015.
Long-term debt was $1,737.6 million as of Dec 31, 2016, higher than $1,720.5 million as of Dec 31, 2015.
The company invested $383 million in 2016 to improve its infrastructure.
Guidance
Aqua America reiterated 2017 earnings guidance in the range of $1.34–1.39 per diluted share. The company expects customer base to expand by 1.5–2% in 2017.
For 2017, the company's capital investment budget is $450 million. This is part of its planned investment of nearly $1.2 billion during the 2017–2019 period.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Aqua America, Inc. Price and Consensus
Aqua America, Inc. Price and Consensus | Aqua America, Inc. Quote
VGM Scores
At this time, Aqua America's stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'D'. Following the exact same course, the stock was allocated also 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.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.