American Water Works Company, Inc.
) unveiled its 2014 ongoing earnings guidance and reiterated 2013
adjusted earnings projections. The company's share price edged up
1.4% from the previous day's closing price to $42.04 per share on
Dec 18, 2013. The upward movement in the share price reflects the
market's positive reaction.
American Water Works expects its 2014 earnings in the range of
$2.35 - $2.45 per share, up 8.3% to 10.4% year over year from
2013 earnings estimates. The company reaffirmed its 2013 adjusted
earnings estimates in the band of $2.17 - $2.22 per share.
For 2012, American Water Works reported earnings of $2.11 per
share. The company's earnings guidance for 2013 and 2014 will
rise from the 2012 level primarily on the back of financial as
well as operational synergies from its acquisition programs.
We note that American Water Works' acquisition strategy involves
buying up assets having the same line of operations, which are
immediately accretive. Year to date, the company has completed 15
acquisitions, including water as well as wastewater assets.
On Dec 16 2013, American Water Works acquired water system assets
from the city of Whitwell in southeast Tennessee for $1.5
million. This acquisition helped the company to add almost 2,800
Under its capital expenditure program, American Water Works
invested $665.3 million during the first nine months of 2013. The
company plans to spend approximately $285 million in the last
three months of 2013.
American Water Works' steady effort towards acquisition of new
assets while upgrading aging infrastructure will enable it to
provide uninterrupted water supply to its customers. Further, the
company's strategy of increasing headcount and improving consumer
safety will boost its near-term performance.
American Water Works currently has a Zacks Rank #3 (Hold).
However, other better-ranked water utilities include
Middlesex Water Co.
), with a Zacks Rank #1 (Strong Buy), and
Connecticut Water Service Inc.
California Water Service Group
), each with a Zacks Rank #2 (Buy).
AMER WATER WORK (AWK): Free Stock Analysis
CONN WATER SVC (CTWS): Free Stock Analysis
CALIF WATER SVC (CWT): Free Stock Analysis
MIDDLESEX WATER (MSEX): Free Stock Analysis
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