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Why Is Consolidated Water (CWCO) Up 1.2% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Consolidated Water (CWCO). Shares have added about 1.2% in that time frame, underperforming 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 catalysts.

Consolidated Water Q2 Earnings Miss, Revenues Beat

Consolidated Water Co. Ltd.  reported second-quarter 2019 earnings of 16 cents per share, lagging the Zacks Consensus Estimate by a penny but increasing from the year-ago figure of 12 cents by 33.3%.

Total Revenues

The company’s total revenues in second-quarter 2019 came in at $18.3 million, up from the year-ago figure of $15.1 million by 21.2%. Total revenues also surpassed the Zacks Consensus Estimate of $17 million by 7.6%.

The year-over-year improvement can be attributed to greater contribution from its manufacturing segment and higher retail revenues.

Segment Details

Retail revenues in second-quarter 2019 increased nearly 11.3% year over year to $6.98 million.

Bulk revenues came in at $6.9 million in second-quarter 2019, down 9.6% from the prior-year figure.

Manufacturing revenues amounted to nearly $4.3 million, up a whopping 330% year over year.

Services revenues of $0.1 million were down 26.1% from the year-ago level.

Highlights of the Release

In second-quarter 2019, total cost of revenues increased 21.2% year over year to $10.8 million.

General and administrative expenses increased 12.4% from the year-ago quarter to $4.9 million.

Income from operations in the reported quarter was $2.95 million, up 70.5% year over year.

Financial Highlights

As of Jun 30, 2019, Consolidated Water’s cash and cash equivalents totaled $41.9 million, up from $31.3 million on Dec 31, 2018.

Cash provided (used in) by operating activities in first-half 2019 was $6.1 million versus ($8.1) million in the comparable year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -6.06% due to these changes.

VGM Scores

At this time, Consolidated Water has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated 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.

Outlook

Consolidated Water has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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