Zacks Investment Research downgraded
Artesian Resources Corporation
) to a Zacks Rank #5 (Strong Sell) on May 29, 2013.
Why the Downgrade?
ARTESIAN RES (ARTNA): Free Stock Analysis
AMER STATES WTR (AWR): Free Stock Analysis
CONSOLTD WATER (CWCO): Free Stock Analysis
AQUA AMER INC (WTR): Free Stock Analysis
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Things aren't shaping too well for Artesian Resources, as this
water utility disappointed with its lackluster financial results
for the first quarter of 2013. The company's earnings per share
in the quarter came in at 19 cents versus 29 cents earned in the
year-ago quarter. The results were 32.1% below the Zacks
Consensus Estimate of 28 cents.
Revenues were down 2.2% year over year to $16.3 million as a 3.2%
decline in Water sales revenue more than offset roughly 6%
increase in the company's Non-utility revenue and a 7% increase
in Utility revenue from miscellaneous sources.
Talking of costs/margins of Artesian Resources, operating
expenses in the quarter rose 3.7% year over year leading to a 470
basis point fall in operating margin. Also, the results were
largely hit by increased legal expenses.
Following the release of the results, earnings estimates for
Artesian Resources have come down in the last 30 days. The Zacks
Consensus Estimate for 2013 decreased by 8.5% to $1.07 while for
2014, the estimate went down by 2.4% to $1.24.
Also, negative earnings surprises in three out of trailing four
quarters have led to an average negative earnings surprise of
8.1%. Currently, we have an Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of -4.7% for 2013 and 1.6% for 2014.
Other Stocks to Consider
Artesian Resources currently has a market capitalization of
$195.6 million. Other stocks to watch out for in the industry are
American States Water Company
Aqua America Inc.
Consolidated Water Co. Ltd.
), each with a Zacks Rank #2 (Buy).