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Why Is Consolidated Water (CWCO) Up 2.9% 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 2.9% 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 Q1 Earnings, Revenues Top Estimates

Consolidated Water Co. Ltd. reported first-quarter 2019 earnings of 20 cents per share, exceeding both the Zacks Consensus Estimate and the year-ago figure by a penny.

Total Revenues

The company’s total revenues in first-quarter 2019 came in at 17 million, up from the year-ago figure of $15 million by 13.3%. Total revenues also surpassed the Zacks Consensus Estimate of $16 million by 6.2%. The year-over-year improvement can be attributed to better contribution from its manufacturing segment and marginally higher retail revenues.

Segment Details

Retail revenues in first-quarter 2019 increased nearly 4% year over year to $6.7 million.

Bulk revenues came in at $7.5 million in first-quarter 2019, down 4.5% from the prior-year figure.

Manufacturing revenues amounted to nearly $3.1 million, up a whopping 459% year over year.

Services revenues of $0.1 million were down 18.7% from the year-ago level.

Highlights of the Release

In first-quarter 2019, total cost of revenues increased 19.1% year over year to $10 million, owing to increase in costs in Retail and Manufacturing segments.

General and administrative expenses declined 6.1% from the year-ago quarter to $4.7 million.

Financial Highlights

As of Mar 31, 2019, Consolidated Water’s cash and cash equivalents totaled $38 million, up from $31.3 million on Dec 31, 2018.

Cash provided by operating activities in first-quarter 2019 was $3.7 million compared with $0.7 million in the year-ago period.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months.

VGM Scores

At this time, Consolidated Water has a strong Growth Score of A, though it is lagging a lot 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 B. 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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