A Look Back at Water Infrastructure Stocks’ Q3 Earnings: Energy Recovery (NASDAQ:ERII) Vs The Rest Of The Pack
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at water infrastructure stocks, starting with Energy Recovery (NASDAQ:ERII).
Trends towards conservation and reducing groundwater depletion are putting water infrastructure and treatment products front and center. Companies that can innovate and create solutions–especially automated or connected solutions–to address these thematic trends will create incremental demand and speed up replacement cycles. On the other hand, water infrastructure and treatment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.
The 5 water infrastructure stocks we track reported a satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 3.9% on average since the latest earnings results.
Energy Recovery (NASDAQ:ERII)
Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ:ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.
Energy Recovery reported revenues of $38.58 million, up 4.2% year on year. This print fell short of analysts’ expectations by 1.4%, but it was still a very strong quarter for the company with an impressive beat of analysts’ earnings and EBITDA estimates.
David Moon, President and CEO, commented on the financial results, “We delivered strong third quarter results, hitting the upper end of our guidance for the quarter and, although there is still work to be done, we believe we are well-positioned in this quarter to deliver on our guidance for the full year. Our core desalination business continues to demonstrate durability of growth, our wastewater business continues to expand, and we are making real progress this year in our CO2 refrigeration business.”
Interestingly, the stock is up 11.1% since reporting and currently trades at $19.86.
Best Q3: Mueller Water Products (NYSE:MWA)
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE:MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Mueller Water Products reported revenues of $348.2 million, up 15.5% year on year, outperforming analysts’ expectations by 6.5%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue and EBITDA estimates.
Mueller Water Products achieved the biggest analyst estimates beat and fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $24.15.
Is now the time to buy Mueller Water Products? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Tennant (NYSE:TNC)
As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE:TNC) designs, manufactures, and sells cleaning products to various sectors.
Tennant reported revenues of $315.8 million, up 3.6% year on year, falling short of analysts’ expectations by 1.1%. It was a slower quarter as it posted a miss of analysts’ earnings and EBITDA estimates.
Interestingly, the stock is up 8.5% since the results and currently trades at $94.72.
Read our full analysis of Tennant’s results here.
Watts Water Technologies (NYSE:WTS)
Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Watts Water Technologies reported revenues of $543.6 million, up 7.8% year on year. This result met analysts’ expectations. Overall, it was a satisfactory quarter as it also recorded a decent beat of analysts’ operating margin estimates.
The stock is up 4.9% since reporting and currently trades at $207.24.
Read our full, actionable report on Watts Water Technologies here, it’s free.
Xylem (NYSE:XYL)
Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Xylem reported revenues of $2.10 billion, up 1.3% year on year. This print lagged analysts' expectations by 3.2%. It was a slower quarter as it also produced a miss of analysts’ organic revenue estimates.
Xylem had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is down 6% since reporting and currently trades at $122.54.
Read our full, actionable report on Xylem here, it’s free.
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