Consolidated Water Beats on Q4 Earnings - Analyst Blog


Consolidated Water Co. Ltd. ( CWCO ) reported fourth-quarter 2013 earnings per share of 7 cents, beating the Zacks Consensus Estimate of 5 cents by 40.0%. However, on a year-over-year basis, earnings plunged a substantial 72.0% due to a decline in the company's interest income from Ocean Conversion (BVI) Ltd.

For the year 2013, earnings per share stood at 58 cents, missing the Zacks Consensus Estimate by a cent. Earnings dropped 9.4% year over year.

Share prices of Consolidated Water showed a northward movement following the earnings beat. Favorable financial results in the reported quarter together with promising prospects led to a 5.3% increase in the share price to $13.00 per share on Mar 18.


For the quarter under review, Consolidated Water's total revenues were $15.3 million, lagging the Zacks Consensus Estimate of $16 million by 4.6%. Quarterly revenues also declined 8.4% year over year.

In 2013, revenues were reported at $63.8 million, down 2.5% from $65.5 million in 2012. The shortfall can be attributed to a 5.0% decline in Retail Water sales due to lower gallons of sale from the company's Cayman retail operation.

Operational Update

In 2013, Consolidated Water's total cost of revenues was $40.3 million, down 7.2% year over year due to a decline in costs of Retail and Bulk segment revenues.

During the year, general and administrative expenses increased 8.9% year over year to $15.8 million due to higher expenses incurred on project development.

A decrease in yearly revenue was compounded by higher general and administrative expenses. This was partially offset by a drop in total cost of revenues and absence of impairment loss in the reported year. This led to an operating margin of 12.0% compared with 10.6% in 2012.

Consolidated Water's interest expenses totaled $0.48 million, down 44.8% year over year primarily due to the redemption of debt and a decline in the principal balances of the company's outstanding bonds.

Financial Update

As of Dec 31, 2013, the company's cash and cash equivalents were $33.6 million versus $33.9 million as of Dec 31, 2012.

The company had no outstanding long-term debt as of Dec 31, 2013 compared with $5.2 million at the end of 2012.

At the Peers

Connecticut Water Service Inc. ( CTWS ) reported fourth-quarter 2013 earnings of 17 cents per share, lagging the Zacks Consensus Estimate of 28 cents by 39.3%.

California Water Service Group ( CWT ) reported fourth-quarter 2013 earnings of 12 cents per share, beating the Zacks Consensus Estimate of 5 cents by an impressive 140.0%.

American States Water Company ( AWR ) posted fourth-quarter 2013 earnings of 30 cents per share, beating the Zacks Consensus Estimate of 19 cents by 57.9%.

Consolidated Water currently has a Zacks Rank #3 (Hold).

AMER STATES WTR (AWR): Free Stock Analysis Report

CONN WATER SVC (CTWS): Free Stock Analysis Report

CONSOLTD WATER (CWCO): Free Stock Analysis Report

CALIF WATER SVC (CWT): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: AWR , CTWS , CWCO , CWT

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