Aqua America Earnings Preview

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Aqua America (NYS: WTR) beat estimates by $0.01 last quarter, and investors are hoping it can beat them again. The company will unveil its latest earnings on Wednesday, Aug. 3. Aqua America provides water or wastewater services to approximately 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, New York, Florida, Indiana, Virginia, Maine, Missouri, South Carolina, and Georgia.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Aqua America, with seven of 12 analysts rating it a hold. Analysts don't like Aqua America as much as competitor American Water Works overall. Ten out of 15 analysts rate American Water Works a buy, compared with five of 12 for Aqua America. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $189.2 million in revenue this quarter. That would represent a rise of 6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.22 to $0.26.

What our community says:
CAPS All-Stars are solidly behind the stock, with 97.4% giving it an "outperform" rating. The community at large agrees with the All-Stars, with 94.2% granting it a rating of "outperform." Fools are gung-ho about Aqua America and haven't been shy with their opinions lately, logging 184 posts in the past 30 days. Even with a robust four out of five stars, Aqua America's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Aqua America's profit has risen year over year by an average of 23.9%. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross and net margins over the past four quarters. 

QuarterQ1Q4Q3Q2
Gross Margin60.7%60.9%64.9%61.2%
Net Margin17.7%16.1%21.1%16.7%
One final thing: If you want to keep tabs on Aqua America's movements, and for more analysis on the company, make sure you add it to your Watchlist.

At the time this article was published Motley Fool newsletter services have recommended buying shares of Aqua America.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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