American Water Works AWK is scheduled to release fourth-quarter 2024 results on Feb. 19, after market close. The company delivered a negative earnings surprise of 2.2% in the last reported quarter.

See the Zacks Earnings Calendar to stay ahead of market-making news.

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

Major Factors That Might Have Impacted AWK's Q4 Performance

In October 2024, Pennsylvania American Water, a subsidiary of American Water Works, completed the purchase of the Butler Area Sewer Authority wastewater system for $230 million. The newly acquired wastewater should add more than 15,000 customer connections.

Moreover, during the first nine months of 2024, the company made five acquisitions, which added 33,400 new customers. The demand from the expanded customer base is likely to have boosted fourth-quarter earnings.

American Water Works generates nearly 100% of its net income from regulated operations. The new rate, effective in the previous quarters, is expected to have contributed positively in the to-be-reported quarter.

Q4 Expectations for AWK

The Zacks Consensus Estimate for earnings is pegged at $1.13 per share, implying a year-over-year increase of 28.4%.

The Zacks Consensus Estimate for revenues is pinned at $1.08 billion, indicating an increase of 4.5% from the year-ago reported number.

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for American Water Works 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: Currently, American Water Works carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Stocks to Consider

Investors may consider the following players from the same sector as these have the right combination of elements to post an earnings beat this reporting cycle.

OGE Energy OGE is likely to come up with an earnings beat when it reports fourth-quarter results on Feb. 19. It has an Earnings ESP of +2.41% and a Zacks Rank #2 at present.

OGE’s long-term (three to five years) earnings growth rate is 5.92%. The Zacks Consensus Estimate for earnings is pinned at 48 cents per share, which implies a year-over-year increase of 100%.

CenterPoint Energy CNP is likely to come up with an earnings beat when it reports fourth-quarter results on Feb. 20. It has an Earnings ESP of +0.63% and a Zacks Rank #2 at present.

CNP’s long-term earnings growth rate is 7.12%. The Zacks Consensus Estimate for earnings is pinned at 40 cents per share, which implies a year-over-year increase of 25%.

Vistra VST is likely to come up with an earnings beat when it reports fourth-quarter results on Feb. 27. It has an Earnings ESP of +3.81% and a Zacks Rank #2 at present.

VST’s long-term earnings growth rate is 23.05%. The Zacks Consensus Estimate for earnings is pinned at $1.14 per share, which implies a year-over-year increase of 337.5%.

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

OGE Energy Corporation (OGE) : Free Stock Analysis Report

CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report

American Water Works Company, Inc. (AWK) : Free Stock Analysis Report

Vistra Corp. (VST) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research