American Water Works Company AWK is set to release fourth-quarter 2021 results on Feb 16. In the last reported quarter, the company delivered an earnings surprise of 0.7%.

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

Factors to Consider

American Water’s fourth-quarter earnings are expected to have benefited from efficient cost management. Since Jan 1, 2021, new rates worth $153 million were implemented in AWK’s service territories, which is also likely to have boosted fourth-quarter earnings.

The ongoing addition in customer volume due to acquisitions and organic means is likely to have increased the demand for water and wastewater services as well as boosted earnings in the fourth quarter.

During the quarter, AWK completed the sale of Homeowner Services Group for $1.275 billion. AWK will utilize the cash proceeds from the sale for regulated water and wastewater business to fund near-term incremental capital investments.

Expectations

The Zacks Consensus Estimate for fourth-quarter earnings and revenues is pegged at 86 cents per share and $958.1 million, indicating year-over-year growth of 7.5% and 3.8%, respectively, from the year-ago reported figures.

What the Zacks Model Unveils

Our proven model doesn’t 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. This is not the case here as you see below.

Earnings ESP: The company’s Earnings ESP is -0.88%. 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 #3.

Other Stocks to Consider

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

Eversource Energy ES is likely to come up with an earnings beat when it reports fourth-quarter 2021 results on Feb 17. It has an Earnings ESP of +0.58% and has a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eversource Energy’s long-term (three to five years) earnings growth is currently pegged at 6.2%. The Zacks Consensus Estimate for ES’ 2022 EPS has surged 6.8% year over year.

ONE Gas OGS is likely to come up with an earnings beat when it reports fourth-quarter 2021 results on Feb 23. It has an Earnings ESP of +0.60% and a Zacks Rank of 3, currently.

One Gas’ long-term earnings growth is currently pegged at 5%. The Zacks Consensus Estimate for OGS’ 2022 EPS has increased 5.9% year over year.

ONEOK Inc. OKE is likely to come up with an earnings beat when it reports fourth-quarter 2021 results on Feb 28. It has an Earnings ESP of +0.78% and a Zacks Rank of 3, at present.

ONEOK’s long-term earnings growth is currently pegged at 7.9%. The Zacks Consensus Estimate for OKE’s 2022 EPS has improved 9.3% year over year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.