American Water Works Company AWK is scheduled to release second-quarter 2018 results on Aug 1, after market close. In the last reported quarter, the company delivered a positive earnings surprise of 7.27%.
Let’s see how things are shaping up for this water utility prior to the earnings announcement.
Factors to Consider
The new water rates, which were put into effect on Jan 1, will drive American Water Works' annual revenues by $110 million. Additionally, the company is expanding customer base through strategic acquisitions, which will have a positive impact on earnings.
The company is investing on a consistent basis for infrastructure upgrade, water treatment, improvement of water mains and wastewater systems. The company has been able to lower O&M expenses through operational efficiency. These efforts are likely to boost second-quarter results.
The Zacks Consensus Estimate for second-quarter revenues and earnings per share is pegged at $908.05 million and 81 cents, reflecting year-over-year growth of 7.6% and 11%, respectively.
American Water Works Price and EPS Surprise
Earnings Whispers
A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. However, American Water does not have the combination as elaborated below.
Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Water Works currently has a Zacks Rank #2. The company’s favorable Zacks Rank when combined with the neutral ESP makes earnings beat unlikely.
However, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Utility Stocks With Favorable Combination
Alliant Energy Corporation LNT is expected to release second-quarter results on Aug 2. It has an Earnings ESP of +1.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CenterPoint Energy, Inc CNP is anticipated to release second-quarter results on Aug 3. It has an Earnings ESP of +0.93% and carries a Zacks Rank #2.
Dominion Energy Inc D is expected to release second-quarter results on Aug 1. It has an Earnings ESP of +0.84% and a Zacks Rank #2.
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