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What to Expect From American Water (AWK) in Q3 Earnings?

American Water Works Company AWK is scheduled to report third-quarter 2017 results after the market closes on Nov 1. Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. Let’s see how things are shaping up for the quarter.

Factors to Consider

The Zacks Consensus Estimate for third-quarter revenues is pegged at $987 million, which reflects year-over-year growth of 6.1% and sequential growth of nearly 16.9%. We expect weather to play a role in quarterly earnings of the company.

The new water rates in New York and Virginia will have a positive impact on total revenues. In addition, the acquisitions made by the company will not only expand its market operations but will be accretive to earnings as well.
 
Earnings Whispers

Our proven model does not conclusively show that American Water Works is likely to beat earnings this quarter as it does not possess the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.

Zacks ESP: The company’s Earnings ESP is +0.73%. This is because the Most Accurate estimate is pegged at $1.09, a penny higher than the Zacks Consensus Estimate.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Water Works has a Zacks Rank #4 (Sell).

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks With Favorable Combination

One can consider a few other companies from the Zacks Utilities Sector that have the right combination of elements to post an earnings beat this quarter.

ALLETE Inc. ALE has an Earnings ESP of +2.89% and a Zacks Rank #1. It is expected to report third-quarter 2017 earnings on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here.


NiSource Inc. NI has an Earnings ESP of +7.69% and a Zacks Rank #2. It is expected to report third-quarter earnings on Nov 1.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +0.14% and a Zacks Rank #2. It is expected to report third-quarter earnings on Nov 3.

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Pinnacle West Capital Corporation (PNW): Free Stock Analysis Report
 
NiSource, Inc (NI): Free Stock Analysis Report
 
Allete, Inc. (ALE): Free Stock Analysis Report
 
American Water Works (AWK): Free Stock Analysis Report
 
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