American Water Works Q4 Profit and Revenue Miss Estimates as Superstorm Sandy Impact Drives Down Earnings (AWK)

American Water Works Q4 Profit and Revenue Miss Estimates as Superstorm Sandy Impact Drives Down Earnings (AWK)


After the bell on Tuesday, water utility company American Water Works Co., Inc. (AWK) reported that it saw a decline in profit and revenue for the fourth quarter, missing Wall Street views, largely because of the negative effects following Superstorm Sandy.

The Vorhees, New Jersey-based company said its fourth quarter profit fell 14.5% to $55.4 million, or 31 cents per share, from $64.8 million, or 37 cents per share, in the same quarter a year earlier. According to analysts polled by Thomson Reuters, this was below the consensus view of 34 cents per share.

Revenue for the quarter rose about 6% to $680.91 million from $639.77 million a year earlier. Again, this was below analysts’ view of $699.64 million.

The disappointing earnings were largely impacted by the devastating effects from Superstorm Sandy. Increased costs, reduced sales, and a $7 million donation to the Water Charitable Foundation drove down earnings for the fourth quarter. However, this was expected; the company announced last month that it was expecting to see reduced earnings because of the storm that rocked the Northeast.

Despite the disappointing quarter, overall income in 2012 increased 16% to $358.1 million, or $2.11 per share.

Looking ahead, American Water is expecting full-year 2013 net income to be in the range of $2.15 and $2.25 per share. Analysts are projecting earnings of $2.22 per share in 2013.

American Water shares were inactive during pre-market trading on Wednesday. The stock is up +16.24% over the past twelve months.

The Bottom Line
Shares of American Water (AWK) have a dividend yield of 2.54% based on last night’s closing price of $39.43 and the company’s annualized dividend payout of $1.00 per share.

American Water Works Co., Inc. (AWK) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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