American Water Works Misses on Revenues but Beats on EPS

Seth Jayson, The Motley Fool
Updated

American Water Works (NYS: AWK) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), American Water Works missed slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew slightly and GAAP earnings per share contracted.


Gross margins expanded, operating margins increased, and net margins shrank.

Revenue details
American Water Works tallied revenue of $618.6 million. The eight analysts polled by S&P Capital IQ anticipated revenue of $630.8 million on the same basis. GAAP reported sales were 2.8% higher than the prior-year quarter's $601.8 million.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.29. The 12 earnings estimates compiled by S&P Capital IQ forecast $0.28 per share. GAAP EPS of $0.24 for Q1 were 11% lower than the prior-year quarter's $0.27 per share. (The prior-year quarter included $0.04 per share in earnings from discontinued operations.)

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 49.9%, 230 basis points better than the prior-year quarter. Operating margin was 25.8%, 190 basis points better than the prior-year quarter. Net margin was 6.8%, 110 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $714.1 million. On the bottom line, the average EPS estimate is $0.49.

Next year's average estimate for revenue is $2.89 billion. The average EPS estimate is $1.96.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 216 members rating the stock outperform and 13 members rating it underperform. Among 43 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give American Water Works a green thumbs-up, and one give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on American Water Works is outperform, with an average price target of $35.27.

Can your portfolio provide you with enough income to last through retirement? You'll need more than American Water Works. Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks." Click here for instant access to this free report.

At the time thisarticle 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. 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.

Advertisement