American Water (AWK) to Report Q3 Earnings: What's in Store?

Zacks Equity Research

American Water Works Company AWK is set to release third-quarter 2020 results on Nov 4, after market close. In the last reported quarter, the company delivered an earnings surprise of 1.04%.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Note

American Water has been enjoying the benefits of both organic and inorganic initiatives. The company has a predominantly residential customer base. Strong demand from residential customers for water and wastewater services is likely to have had a positive impact on third-quarter earnings. The reopening of economic activities is expected to have revived demand from the industrial customer group and positively impacted earnings.

American Water — through its subsidiaries — ensured no disconnection of utility services due to non-payment of dues. This might have affected the bottom line to some extent.

Expectations

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.38 per share, which indicates year-over-year growth of 3.8%. The Zacks Consensus Estimate for total revenues is pegged at $1.04 billion, which indicates year-over-year growth of 2.7%.

American Water Works Company, Inc. Price and EPS Surprise

American Water Works Company, Inc. Price and EPS Surprise
American Water Works Company, Inc. Price and EPS Surprise

American Water Works Company, Inc. price-eps-surprise | American Water Works Company, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for American Water this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Water currently has a Zacks Rank #2.

Stocks to Consider

Here are a few companies worth considering from the same sector that have the right combination of elements to beat on earnings in the upcoming releases.

NiSource Inc. NI is set to release third-quarter 2020 numbers on Nov 2. It has an Earnings ESP of +150.00% and carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SJW Group SJW is set to release third-quarter 2020 numbers on Nov 4. It currently has an Earnings ESP of +2.15% and carries a Zacks Rank #3.

Pampa Energia PAM is set to release third-quarter 2020 soon.  It presently has an Earnings ESP of +1,537.50% and carries a Zacks Rank #1.

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