Aqua America Inc. (WTR) reported fourth quarter earnings per share of 28 cents, a penny higher than the Zacks Consensus Estimate and up 7.7% from the year-ago earnings of 26 cents per share.
GAAP earnings for the quarter were 38 cents per share compared with 32 cents in the prior-year quarter. The difference between operating and GAAP numbers was due to a gain on sale of the Fort Wayne system.
In 2014, Aqua America posted earnings of $1.20 per share, in line with the Zacks Consensus Estimate but 4.3% higher than the 2013 figure of $1.15 per share.
Total Revenue
Fourth quarter revenues of 191.4 million were up 2.3% year over year from $187.1 million, but missed the Zacks Consensus Estimate of $198.0 million.
Full-year revenues came in at $779.9 million, lagging the Zacks Consensus Estimate of $794 million by 1.8%. Total revenues were 2.34% above the 2013 revenue.
Highlights of the Release
Total cost and operating expenses in the reported quarter increased 0.5% to $118.8 million. Operating income increased 5.5% to $72.6 million, thanks to higher revenues.
Interest expenses decreased 2.5% in the fourth quarter to $19 million.
Aqua America’s capital investment in 2014 to enhance water quality and ensure service reliability was $329 million, compared with $308 million in 2013.
Other Company Release
American Water Works Company, Inc. (AWK) reported earnings of 52 cents per share in the fourth quarter of 2014, beating the Zacks Consensus Estimate by a penny.
American States Water Company (AWR) reported earnings of 35 cents per share in the fourth quarter of 2014, surpassing the Zacks Consensus Estimate by 40%.
California Water Service Group (CWT) reported fourth-quarter 2014 operating earnings of 24 cents per share, 33.3% above the Zacks Consensus Estimate of 18 cents.
Our View
Aqua America is a consistent performer and has been increasing its service footprint across the U.S. through strategic acquisitions. The inorganic strategy helps expand the company’s customer base. The company completed 16 acquisitions in 2014 and early signs indicate a similar trend this year.
Aging pipelines are a serious threat for the water utilities across the country. We appreciate the initiatives taken by the company to address this issue. To that end, it plans to invest more than $1 billion over the next three years in water main replacement.
Aqua America has a Zacks Rank #3 (Hold).
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