The two largest publicly traded U.S. water utilities, American Water Works Co. and Aqua America Inc., reported higher revenue in the first quarter even as costs were exacerbated by one of the country’s coldest winters on record.
American Water said operating revenue rose 7.2 percent to $681.9 million as net income gained 18 percent to $68.1 million. Revenue at Aqua America rose 2.3 percent to $182.7 million from a year earlier, the company said in a statement.
“During one of the toughest winters in decades, income from continuing operations for the quarter increased,” Bryn Mawr, Pennsylvania-based Aqua America said in the statement.
A polar vortex that gripped much of the U.S. helped make the winter of 2013-2014 one of the snowiest and most frigid on record. March was the coldest since 2002 in the contiguous 48 states. Detroit and Chicago reported the highest and third-highest snow totals for records dating to the 1880s.
American Water, based in Voorhees, New Jersey, yesterday said expenses rose. A chemical storage tank owned by Freedom Industries Inc. on Jan. 9 leaked 4-methylcyclohexane methanol, or MCHM, and PPH/DiPPH, a mix of polyglycol ethers into the Elk River near the West Virginia American Water treatment plant in Charleston, cutting $5.9 million from the water utility’s sales.
The company’s shares have gained 10 percent this year compared with an 8 percent advance in Aqua America’s stock.
American Water Chief Executive Officer Jeff Sterba is retiring after the annual shareholder meeting tomorrow, with Chief Finance Officer Susan Story replacing him.
Sterba, CEO since August 2010, “has been a large part of American Water’s transformation into the best-of-breed operator it is today,” Ryan Connors, a Janney Montgomery Scott LLC analyst, said in note that reiterated his buy rating.
“With this said, Susan Story has proven herself more than capable of leading American Water in the year she has been with the company as CFO, and we have full confidence that she will further the company’s position atop the water and, perhaps wastewater, utility landscape,” Connors said.