Aqua America Inc.
) reported second-quarter 2013 pro forma earnings per share of 38
cents, beating the Zacks Consensus Estimate by 2 cents and
year-ago level by 26.7%.
The improvement in earnings was primarily driven by positive
impact from a number of factors, including operational
competence, asset rebalancing strategy, benefits from the changes
of the repair tax accounting procedure and upgrading
In the quarter under review, Aqua America's revenues were $195.7
million, missing the Zacks Consensus Estimate by $4.3 million.
However, quarterly revenues increased 2.1% year over year.
Aqua America's total costs and expenses were $115 million, up
9.8% year over year due to a rise in operations and maintenance,
depreciation and amortization expenses, and higher taxes (other
than income taxes).
An increase in revenues was more than offset by higher total
costs and expenses. In the reported quarter, operating margin
declined to 41.2% from 45.4% in the year-ago quarter.
Aqua America's interest expenses totaled $19.2 million, down 1.5%
year over year primarily due to a decline in long-term debt.
As of Jun 30, 2013, Aqua America's current assets were $221.6
million versus $261 million as of Dec 31, 2012.
Long-term debt as of Jun 30, 2013 was $1,489.8 million versus
$1,544 million as of Dec 31, 2012.
During the first six months of 2013, Aqua America spent $134.9
million, which was funded from internal sources, under its
capital investment program. The company utilized major portion of
the fund to upgrade distribution networks and replace older
Dividend and Stock-split Update
The board of directors of Aqua America announced an increase of
9% quarter to quarter in its quarterly dividend to 19 cents. This
new dividend will be payable on Sep 1, 2013 to shareholders of
record at the close of business on Aug 16, 2013.
Further, the board also approved a 5-for-4 stock split, which
will be effective from Sep 1, 2013.
The revised dividend will be applicable to the shares prior to
the stock split. On the other hand, the stock split will be
effective through a distribution of one share for each four
shares outstanding as of Aug 16, 2013, on Sep 1, 2013.
Other Company Releases
) second quarter 2013 operating earnings per share of 37 cents
beat the Zacks Consensus Estimate by 9 cents.
California Water Service Group
) announced second-quarter 2013 operating earnings of 28 cents
per share, in line with the Zacks Consensus Estimate.
Middlesex Water Company
) reported second-quarter 2013 earnings per share of 28 cents,
beating the Zacks Consensus Estimate by a penny.
It is evident from Aqua America's activities that the company is
currently revamping its existing processes while expanding
operations via inorganic route. In the first half of 2013, the
company acquired eight water and wastewater utility systems.
These acquisitions will allow Aqua America to further expand its
On the divestiture front, Aqua America sold roughly two-thirds of
its operations in Florida for $52.3 million in Mar 2013. The
company is also in the middle of negotiations to sale its asset
in Florida with a transaction value of $36.8 million. We consider
these divestitures as a positive move; the company can utilize
the net proceeds from these sales to profitable ventures.
In Jul 2013, Aqua America announced that its subsidiary in Texas
plans to upgrade its water and sewer infrastructure, with an
estimated investment of $17.1 million. This initiative will help
the company to provide clean water to its customers.
In 2013, Aqua America has received rate awards and infrastructure
surcharges in a number of states. These will encourage the
company to invest more for the improvement of utility
Bryn Mawr, PA.-based Aqua America is a publicly traded water
utility company. The company serves approximately 3 million
residents in Florida, Georgia, Indiana, Illinois, New Jersey,
North Carolina, Ohio, Pennsylvania, Texas and Virginia. Aqua
America currently has a Zacks Rank #3 (Hold).
CALIF WATER SVC (CWT): Free Stock Analysis
MIDDLESEX WATER (MSEX): Free Stock Analysis
SJW CORP (SJW): Free Stock Analysis Report
AQUA AMER INC (WTR): Free Stock Analysis
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