Water and wastewater utility company American Water Works Company, Inc. (AWK) on Wednesday reported a 14% year-over-year increase in profit for the second quarter, boosted by quarterly revenues growth of 4% as well as successful cost containment initiatives. Earnings per share for the quarter increased 14.3% and topped analysts' expectations by a penny. However, total volume of water sold for the quarter decreased 5.5% or 5.4 billion gallons.
In a statement, president and chief executive officer, Don Correll said, "American Water is pleased to announce solid results for another quarter," said, of American Water. These results were achieved despite the wet weather in the Northeast and they reflect our ability to deliver on our core strategies as we manage our costs with discipline. We are making the necessary investments in our infrastructure to deliver high-quality, reliable service and seeking appropriate returns on those investments."
The Voorhees, New Jersey-based company reported net income of $51.99 million or $0.32 per share for the second quarter, 14.3% higher than $45.50 million or $0.28 per share in the prior-year quarter.
On average, seven analysts polled by Thomson Reuters expected earnings of $0.31 per share for the second quarter. Analysts' estimates typically exclude special items.
Operating revenues for the quarter increased 4% to $612.74 million, up from $589.37 million in the same quarter last year, but missed four Wall Street analysts' consensus estimate of $623.02 million.
The company's Regulated Businesses revenues increased by $28.7 million, despite wet weather in the Northeast, while non-regulated Businesses' revenues decreased by $2.8 million or 4.1% from last year.
Total volume of water sold for the second quarter decreased 5.5% or 5.4 billion gallons, representing a reduction of $24.0 million in revenues, about $12.6 million in net income, or $0.08 per share.
Operating income for the second quarter rose 11% to $157.19 million from $142.66 million in the year-ago quarter. Total operating expenses for the quarter were $455.55 million, 2% higher than $446.66 million in the prior-year quarter.
American Water's also boosted its quarterly cash dividend payment by 5% to $0.21 per share from $0.20 per share on July 31, 2009. Two more independent board members, Julie Dobson and Stephen Adik, were appointed during the quarter, bringing the outside independent directors to seven out of a board of 11 members.
For the first six month, the company reported a net loss of $361.09 million or $2.23 per share, narrower than $686.99 million or $4.29 per share in the prior-year period.
Operating revenues for the year-to-date period rose to $1.16 billion from $1.10 billion in the same period last year.
AWK closed Wednesday's regular trading session at $20.00, up $0.01 or 0.05% on a volume of 0.62 million shares, lower than the three month average volume of 1.12 million shares.
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