How the Wheels Came Off California Water Service Group's Bus
California Water Service Group (NYS: CWT) reported earnings on Feb. 29. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), California Water Service Group whiffed on revenues and earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
California Water Service Group booked revenue of $103.0 million. The three analysts polled by S&P Capital IQ predicted a top line of $117.1 million on the same basis. GAAP reported sales were 2.3% lower than the prior-year quarter's $105.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.04. The five earnings estimates compiled by S&P Capital IQ predicted $0.18 per share. GAAP EPS of $0.04 for Q4 were 67% lower than the prior-year quarter's $0.12 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 54.5%, 750 basis points worse than the prior-year quarter. Operating margin was 7.1%, 580 basis points worse than the prior-year quarter. Net margin was 1.8%, 280 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $102.7 million. On the bottom line, the average EPS estimate is $0.04.
Next year's average estimate for revenue is $535.6 million. The average EPS estimate is $1.06.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 242 members out of 252 rating the stock outperform, and 10 members rating it underperform. Among 89 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 88 give California Water Service Group a green thumbs-up, and one gives it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on California Water Service Group is outperform, with an average price target of $20.75.
Over the decades, small-cap stocks like California Water Service Group have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add California Water Service Group to My Watchlist.
At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of California Water Service Group. Motley Fool newsletter services have recommended buying shares of California Water Service Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.