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Why Is Consolidated Water (CWCO) Up 4.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Consolidated Water (CWCO - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Consolidated Water 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.

Consolidated Water Beats on Q3 Earnings and Revenues

Consolidated Water Co. Ltd. reported third-quarter 2018 earnings of 16 cents per share, beating the Zacks Consensus Estimate by a penny.

In the quarter under review, the company’s total revenues were $18.8 million, surpassing the Zacks Consensus Estimate of $15 million by 23.4%. Revenues also improved 13.3% from the year-ago quarter’s $16.6 million. The year-over-year improvement was due to better contribution from all business segments.

Segment Details

Retail
revenues in the third quarter were up 10.7% year over year to $6.2 million.

Bulk revenues were $8.6 million, up 8.9% from the prior-year figure.

Manufacturing revenues were nearly $3.3 million, up 8.3% year over year.

Services revenues of $0.8 million were up from the year-ago figure of $0.1 million by 627%.

Highlights of the Release

In the third quarter, total cost of revenues increased 10.1% year over year to $11.3 million, due to increase in costs from all the segments of the company.

It incurred general and administrative expenses of $4.94 million, up 1% from the prior-year figure.

As of Sep 30, 2018, Consolidated Water’s cash and cash equivalents were $34.4 million, down from $47.2 million on Dec 31, 2017.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 6.9% due to these changes.

VGM Scores

At this time, Consolidated Water has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 this revision looks promising. It comes with little surprise Consolidated Water has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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