It has been about a month since the last earnings report for American States Water (AWR). Shares have lost about 1.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is American States Water due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

American States Water Q2 Earnings & Sales Top Estimates

American States Water Company reported second-quarter 2024 operating earnings per share (EPS) of 85 cents, which beat the Zacks Consensus Estimate of 84 cents by 1.2%.

Total Revenues

Operating revenues came in at $155.3 million, which outpaced the Zacks Consensus Estimate of $138 million by 12.6%. However, the top line declined 1.3% from $157.4 million reported in the prior-year period.

Highlights of the Release

Operating expenses in the quarter totaled $103.6 million, up 5.2% from the year-ago quarter’s level of $98.5 million. This was due to higher water purchased for pumping expenses, administrative and general costs, and other operation costs.

Operating income totaled $51.7 million, down 12.2% from $58.9 million recorded in the corresponding period of 2023.

Interest expenses amounted to $13.1 million, up 22.5% year over year. Interest income totaled $2.1 million, up 16.1% year over year.

Segmental Details

Earnings from the Water segment came in at 67 cents per share, down 26.4% from 91 cents a year ago.

EPS from the Electric segment was 1 cent, down 2 cents from the year-ago quarter’s level

EPS from the Contracted Services segment was 19 cents, up 58.3% year over year.

The loss from AWR (Parent) was 2 cents per share, in line with the year-ago quarter’s loss.

Financial Update

As of Jun 30, AWR’s cash and cash equivalents totaled $3.6 million compared with $14.1 million as of Dec 31, 2023.

As of Jun 30, the company’s long-term debt was $640 million compared with $575.6 million as of Dec 31, 2023.

In the first six months of 2024, cash provided by operating activities totaled $70.5 million compared with $17.8 million in the year-ago period.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, American States Water has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile 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

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, American States Water has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

American States Water is part of the Zacks Utility - Water Supply industry. Over the past month, California Water Service Group (CWT), a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended June 2024 more than a month ago.

California Water Service Group reported revenues of $244.3 million in the last reported quarter, representing a year-over-year change of +25.9%. EPS of $0.70 for the same period compares with $0.17 a year ago.

California Water Service Group is expected to post earnings of $1.09 per share for the current quarter, representing a year-over-year change of +81.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for California Water Service Group. Also, the stock has a VGM Score of D.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American States Water Company (AWR) : Free Stock Analysis Report

California Water Service Group (CWT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research