A month has gone by since the last earnings report for California Water Service Group (CWT). Shares have added about 1.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is California Water Service Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
California Water Q4 Earnings & Sales Surpass Estimates
California Water Service Group recorded fourth-quarter 2022 operating earnings per share (EPS) of 35 cents, which surpassed the Zacks Consensus Estimate of 22 cents by 59.1%. The bottom line improved 400% from the year-ago quarter’s 7 cents.
For 2022, CWT reported earnings of $1.77 per share, down 9.7% from $1.96 in the previous year.
Operating revenues for fourth-quarter totaled $200.9 million, which surpassed the Zacks Consensus Estimate of $180 million by 11.6%. The top line improved 16% from $173.3 million in the prior-year quarter.
Total revenues for 2022 came in at $846.4 million, up 7% from $790.9 million in 2021.
Due to increased operational costs, California Water’s total operating expenses in the fourth quarter were $174.6 million, up 7.2% from the year-ago quarter’s $162.9 million.
Net operating income in the fourth quarter was $26.3 million, up 150.5% from the year-ago quarter’s $10.5 million.
Net interest expenses were $11.1 million, down 1.8% from the year-ago quarter’s $11.3 million.
As of Dec 31, 2022, CWT had cash and cash equivalents of $62.1 million compared with $78.4 million as of Dec 31, 2021.
As of Dec 31, 2022, California Water’s net long-term debt was $1,052.5 million, down 0.2% from $1,055.8 million as of Dec 31, 2021.
Subsidiaries' infrastructure investment was $327.8 million in 2022 compared with $293.2 million in 2021.
In 2023, CWT will no longer be decoupled. The company expects to re-experience revenue and production cost variability this year.
CWT had proposed CPUC of spending $1 billion on water infrastructure investments in the 2022-2024 time period.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
Currently, California Water Service Group has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
California Water Service Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
California Water Service Group is part of the Zacks Utility - Water Supply industry. Over the past month, American Water Works (AWK), a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended December 2022 more than a month ago.
American Water Works reported revenues of $931 million in the last reported quarter, representing a year-over-year change of -2.1%. EPS of $0.81 for the same period compares with $0.85 a year ago.
American Water Works is expected to post earnings of $0.95 per share for the current quarter, representing a year-over-year change of +9.2%. 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 #4 (Sell) for American Water Works. Also, the stock has a VGM Score of F.
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