American Water Works Outruns Estimates Again

American Water Works (NYSE: AWK  ) reported earnings on Aug. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), American Water Works beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved significantly.

Margins grew across the board.

Revenue details
American Water Works booked revenue of $745.6 million. The nine analysts polled by S&P Capital IQ looked for a top line of $711.4 million on the same basis. GAAP reported sales were 11% higher than the prior-year quarter's $674.2 million.

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 $0.66. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.49 per share. GAAP EPS of $0.61 for Q2 were 27% higher than the prior-year quarter's $0.48 per share. (The prior-year quarter included $0.06 per share in earnings from discontinued operations.)

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 56.1%, 540 basis points better than the prior-year quarter. Operating margin was 36.3%, 650 basis points better than the prior-year quarter. Net margin was 14.4%, 190 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $824.9 million. On the bottom line, the average EPS estimate is $0.82.

Next year's average estimate for revenue is $2.90 billion. The average EPS estimate is $2.17.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 233 members out of 246 rating the stock outperform, and 13 members rating it underperform. Among 47 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 45 give American Water Works a green thumbs-up, and two 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 $36.04.

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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. 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.


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