Why Is American States Water (AWR) Up 3.8% Since Last Earnings Report?

A month has gone by since the last earnings report for American States Water (AWR). Shares have added about 3.8% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is American States 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 its most recent earnings report in order to get a better handle on the important drivers.

American States Water Misses Q1 Earnings Estimates

American States Water generated first-quarter 2020 operating earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 40 cents by 5%. However, the bottom line increased 8.5% from 35 cents in the year-ago quarter.

Total Revenues

Operating revenues amounted to $109 million, which beat the Zacks Consensus Estimate of $106 million by 3%. Moreover, the top line moved up 7.2% from $102 million in the prior-year quarter. Total revenues increased primarily on the back of higher revenues in all the segments.

Operational Update

In the quarter under review, American States Water’s total operating expenses were $83.4 million, up 2.2% year over year.

Interest expenses were $6 million, down 4.2% year over year. Also, interest income was $0.5 million, down from $0.9 million in the prior-year quarter.

Segment Details

Earnings in the Water segment were 24 cents, up from 21 cents in the prior-year quarter.

Earnings in the Electric segment amounted to 6 cents, up from 3 cents in the year-ago quarter.

Earnings in the Contracted Services segment were 8 cents, down 27.3% from the year-ago quarter’s tally.

Financial Update

As of Mar 31, 2019, American States Water’s cash and cash equivalents were $0.4 million compared with $1.3 million as of Dec 31, 2019.

As of Mar 31, 2019, the company’s long-term debts were $280.9 million, flat with the figure as of Dec 31, 2019.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, American States Water has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

American States Water has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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