Consolidated Water Misses on Earnings & Revs

Zacks

Consolidated Water Co. Ltd. (CWCO) reported third-quarter 2013 earnings per share of 6 cents, missing the Zacks Consensus Estimate of 8 cents by 25%. On a year-over-year basis, earnings decreased 33.3% due to lower revenues, a rise in general and administrative expenses as well as shares outstanding.

Revenue

The company’s total revenue was $15.4 million, lagging the Zacks Consensus Estimate of $16 million by 3.8%. Quarterly revenues edged down 2.5% year over year due to an 11.9% decline in Retail Water sales, as rainfall was higher in some of the company’s service territories in the reported quarter. This was partially offset by an improvement in revenues at the company’s Bulk Water and Services segments by 2.1% and 65.9% year over year, respectively.

Operational Update

In the quarter under review, Consolidated Water’s total cost of revenues was $10.2 million, down 3.7% year over year due to a decline in costs of Retail and Bulk segment revenues.

General and administrative expenses increased 5.4% year over year to $4.3 million.

A decrease in revenue was compounded by higher general and administrative expenses. This was partly offset by a drop in total cost of revenues. Consequently, operating margin in the reported quarter declined to 5.9% from 7.2% in the year-ago quarter.

Consolidated Water’s interest expenses totaled $0.12 million, down 20.2% year over year primarily due to a decline in long-term debt.

Financial Update

As of Sep 30, 2013, the company’s cash and cash equivalents were $30.8 million versus $33.9 million as of Dec 31, 2012.

Long-term debt as of Sep 30, 2013 was $3.9 million compared with $5.2 million at the end of 2012.

At the Peer

California Water Service Group (CWT) announced third-quarter 2013 operating earnings of 61 cents per share, surpassing the Zacks Consensus Estimate by 9 cents.

Zacks Rank

Consolidated Water currently has a Zacks Rank #3 (Hold). However, other stocks from the industry that are presently performing well include Middlesex Water Company (MSEX) with a Zacks Rank #1 (Strong Buy) and Connecticut Water Service Inc. (CTWS) with a Zacks Rank #2 (Buy).

Read the Full Research Report on CTWS
Read the Full Research Report on MSEX
Read the Full Research Report on CWT
Read the Full Research Report on CWCO


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