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American Water Works Company AWK posted second-quarter 2018 earnings per share of 83 cents, which beat the Zacks Consensus Estimate of 81 cents by 2.5%. The figure improved 13.7% year over year. The uptick was supported by solid growth in the Regulated and Market-Based businesses in the second quarter.
The company reported GAAP earnings of 91 cents, which improved 24.7% from 73 cents in the year-ago quarter.
Total revenues of $853 million missed the Zacks Consensus Estimate of $908 million by 6.1%. However, reported revenues improved 1.2% year over year.
Highlights of the Release
Total operating expenses in the quarter were $551 million, up 3.2% from the year-ago quarter’s tally. The increase was primarily led by higher general taxes and higher depreciation & amortization expenses compared with the year-ago quarter’s levels.
Operating income was $302 million, down 2.6% year over year.
American Water Works Price, Consensus and EPS Surprise
American Water Works Price, Consensus and EPS Surprise | American Water Works Quote
Regulated businesses’ net income was $152 million, up 8.6% from $140 million in the year-ago quarter. Year to date regulated businesses added 10,300 customers through acquisitions and organic growth.
Market-Based businesses’ net income was $13 million compared with $9 million in the year-ago quarter. The year-over-year increase can be attributed to growth in the Homeowner Services Group, supported by customer addition, cost management and the federal income tax rate cut.
Cash and cash equivalents were $68 million as of Jun 30, 2018, up 23.6% from Dec 31, 2017 level.
Long-term debt was $6,345 million as of Jun 30, 2018, lower than $6,490 million as of Dec 31, 2017.
For the first six months of 2018, the company made capital investments of nearly $1.1 billion. The amount includes $713 million primarily allocated toward infrastructure in the Regulated businesses, $363 million toward the Pivotal acquisition and $14 million for regulated acquisitions.
American Water Works reaffirmed the 2018 earnings per share guidance in the range of $3.22-$3.32. The company also provided 2018 earnings guidance GAAP in the range of $3.30-$3.40 per diluted share.
American Water plans to invest $2.0-$2.1 billion, including the acquisition of Pivotal Home Solutions in 2018.
American Water Works carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Water Utility Release
Aqua America Inc WTR reported second-quarter 2018 earnings per share of 37 cents, beating the Zacks Consensus Estimate by a penny.
American States Water Company AWR is expected to report second-quarter 2018 results on Aug 6. The Zacks Consensus Estimate for earnings is pegged at 48 cents.
Consolidated Water Company Ltd CWCO is likely to report second-quarter 2018 results on Aug 8. The Zacks Consensus Estimate for earnings is pegged at 15 cents.
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