Financial Performance & Guidance - 2025 YTD EPS was $4.47, driven by higher revenue on increased rate base and rate case outcomes, up 9.0% vs 2024 on a weather-normalized basis[9] - 2025 EPS guidance is affirmed at $5.70 to $5.75, including $0.10 per share of incremental interest income from the amended HOS seller note[9] - 2026 EPS guidance is initiated at $6.02 to $6.12, assuming the HOS note is repaid around year-end 2025, reflecting consistent future earnings growth within a 7-9% range[12] - The company anticipates 8% EPS growth in 2026 (at midpoint) vs 2025 on a weather-normalized basis[28] Capital Investments & Funding - The company entered into equity forward agreements for approximately $1 billion, assuming settlement mid-year 2026 to fully satisfy 2026 equity needs[9, 35] - The company issued $900 million in senior notes in August 2025[9, 72] - The company plans for $2.5 billion of equity issuances in 2026-2030, including approximately $1 billion in 2026 covered by equity forward agreements[37] - The company's 5-year capital plan increased by $2 billion, with a total investment of $19 billion to $20 billion from 2026-2030[40, 41] - The company's 10-year capital plan increased by $6 billion, with a total investment of $42 billion to $43 billion from 2026-2035[40, 41] Acquisitions & Customer Growth - The company has acquisitions under agreement representing approximately 107,000 customer connections, totaling over $600 million[9, 52, 84] - The company closed acquisitions YTD as of October 29, 2025, representing approximately 17,500 customer connections[53, 83]

Group 1: Water Stocks Overview - Water stocks are shares of companies involved in the supply, treatment, transport, storage, or management of water, including utilities, infrastructure firms, and technology providers [2] - Investors view water stocks as a way to gain exposure to a regulated sector with long-term demand driven by population growth, urbanization, and water scarcity [2] - The companies mentioned had the highest dollar trading volume among water stocks recently [2] Group 2: NuScale Power - NuScale Power Corporation develops and sells modular light water reactor nuclear power plants for various applications, including electrical generation and desalination [3] - The company offers the NuScale Power Module (NPM), which generates 77 megawatts of electricity (MWe), and designs for power plants that can house multiple NPMs [3] Group 3: Coca-Cola - The Coca-Cola Company manufactures and sells a variety of nonalcoholic beverages globally, including soft drinks, water, sports drinks, coffee, tea, and juices [4] Group 4: Ecolab - Ecolab Inc. provides water, hygiene, and infection prevention solutions, operating through three segments: Global Industrial, Global Institutional & Specialty, and Global Healthcare & Life Sciences [5] - The Global Industrial segment focuses on water treatment and cleaning solutions for various industries, including food and beverage processing and power generation [5] Group 5: Xylem - Xylem Inc. designs, manufactures, and services engineered products and solutions, operating through four segments: Water Infrastructure, Applied Water, Measurement & Control Solutions, and Integrated Solutions and Services [6] - The Water Infrastructure segment offers products such as pumps, filtration, disinfection equipment, and mobile dewatering services [6] Group 6: American Water Works - American Water Works Company, Inc. provides water and wastewater services to approximately 1,700 communities across 14 states, serving around 3.5 million active customers [8] - The company serves various customer segments, including residential, commercial, industrial, and public authorities [8]

Core Insights - American Water Works (AWK) reported quarterly earnings of $1.94 per share, exceeding the Zacks Consensus Estimate of $1.90 per share, and up from $1.80 per share a year ago, representing an earnings surprise of +2.11% [1] - The company generated revenues of $1.45 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 9.61%, compared to $1.32 billion in the same quarter last year [2] - The stock has increased approximately 8.3% since the beginning of the year, while the S&P 500 has gained 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.30 on revenues of $1.18 billion, and for the current fiscal year, it is $5.72 on revenues of $4.87 billion [7] - The estimate revisions trend for American Water Works was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Utility - Water Supply industry, to which American Water Works belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Earnings Performance - Third quarter 2025 earnings per share were $1.94, up from $1.80 in the same quarter of 2024, and year-to-date earnings per share were $4.47, compared to $4.17 in 2024, reflecting a 7.2% increase[4] - Weather-normalized year-to-date earnings per share for 2025 were $4.47, a 9% increase from $4.10 in 2024[5] - The company affirmed 2025 weather-normalized earnings per share guidance range of $5.70 to $5.75, including $0.10 per share of incremental interest income from the amended Homeowner Services Group note[7] - The 2026 earnings per share guidance range is set at $6.02 to $6.12, reflecting an 8% growth at the midpoint compared to 2025 guidance[11] - Basic earnings per share for Q3 2025 were $1.94, up from $1.80 in Q3 2024, representing a 7.8% increase[28] Revenue and Income - Operating revenues increased by $124 million and $366 million for the three and nine months ended September 30, 2025, respectively, primarily due to authorized revenue increases from rate cases and infrastructure proceedings[12] - Operating revenues for Q3 2025 reached $1,451 million, a 9.7% increase from $1,323 million in Q3 2024[28] - Operating income for the nine months ended September 30, 2025, was $1,474 million, up 11.8% from $1,318 million in the same period of 2024[28] - Net income attributable to common shareholders for Q3 2025 was $379 million, compared to $350 million in Q3 2024, reflecting an increase of 8.3%[28] - The Regulated Businesses' net income for the third quarter of 2025 was $383 million, compared to $356 million in the same period of 2024, and $872 million for the first nine months, up from $815 million in 2024[11] Capital Investment and Plans - The company plans to invest approximately $3.2 billion across its footprint in 2025, with $2.2 billion already invested in the first nine months[10] - The company announced a capital investment plan of $19 to $20 billion for 2026-2030 and $46 to $48 billion for 2026-2035[11] Merger and Growth Potential - American Water is expecting to close its merger with Essential Utilities by the end of Q1 2027, which will enhance the scale and growth potential of the combined company[6] - The merger will result in a pro forma market capitalization of approximately $40 billion and a combined enterprise value of approximately $63 billion[17] Assets and Liabilities - Total assets as of September 30, 2025, were $34,748 million, an increase from $32,830 million as of December 31, 2024[30] - Cash and cash equivalents increased to $166 million as of September 30, 2025, compared to $96 million at the end of 2024[30] - Total common shareholders' equity increased to $10,907 million as of September 30, 2025, up from $10,332 million at December 31, 2024, representing a growth of 5.55%[31] - Long-term debt rose to $13,022 million from $12,518 million, reflecting an increase of 4.02%[31] - Current liabilities increased to $3,687 million, compared to $3,150 million, marking a rise of 17.04%[31] - Deferred income taxes and investment tax credits grew to $3,064 million from $2,881 million, an increase of 6.35%[31] - Total capitalization and liabilities reached $34,748 million, up from $32,830 million, indicating a growth of 5.83%[31] Expenses and Financial Management - The company reported total operating expenses of $837 million for Q3 2025, a 7.3% increase from $780 million in Q3 2024[28] - Interest expense for Q3 2025 was $158 million, compared to $132 million in Q3 2024, indicating a 19.7% increase[28] - The company is focused on maintaining operational efficiencies and controlling operating expenses to support the affordability of its regulated utility services[25] Other Financial Metrics - Retained earnings increased to $2,662 million, up from $2,112 million, showing a significant rise of 26%[31] - Short-term debt increased to $1,005 million from $879 million, reflecting a growth of 14.31%[31] - Total regulatory and other long-term liabilities rose to $5,514 million from $5,250 million, an increase of 5.04%[31] - Contributions in aid of construction increased to $1,615 million from $1,577 million, representing a growth of 2.41%[31] - Treasury stock at cost remained relatively stable, decreasing slightly from $392 million to $391 million[31]

Core Insights - American Water Works Company, Inc. reported earnings of $1.94 per share for Q3 2025, an increase from $1.80 per share in Q3 2024 [1] - Year-to-date earnings for the period ending September 30, 2025, were $4.47 per share, up from $4.17 per share for the same period in 2024 [1] - The company has demonstrated strong performance in 2025, as noted by the President and CEO, John Griffith [1] Financial Performance - Q3 2025 earnings per share: $1.94, compared to $1.80 in Q3 2024, reflecting a growth of approximately 7.8% [1] - Year-to-date earnings per share for 2025: $4.47, compared to $4.17 in 2024, indicating an increase of about 7.2% [1]

Financial Performance - Operating revenues for Q3 2025 reached $1,451 million, a 9.7% increase from $1,323 million in Q3 2024[22] - Net income attributable to common shareholders for Q3 2025 was $379 million, up from $350 million in Q3 2024, representing an 8.3% increase[25] - Operating income for the nine months ended September 30, 2025, was $1,474 million, an increase of 11.8% from $1,318 million in the same period of 2024[22] - Basic earnings per share for Q3 2025 were $1.94, up from $1.80 in Q3 2024, reflecting a 7.8% increase[22] - Total operating revenues for the three months ended September 30, 2025, were $1,451 million, a decrease of 0.2% compared to $1,453 million for the same period in 2024[62] - Total operating revenues for the nine months ended September 30, 2025, were $3,869 million, an increase of 11.3% from $3,483 million for the same period in 2024[66] - Net income attributable to common shareholders for the three months ended September 30, 2025, was $379 million, compared to $350 million for the same period in 2024, reflecting a growth of 8.3%[144] Assets and Liabilities - Total assets as of September 30, 2025, were $34,748 million, compared to $32,830 million as of December 31, 2024, reflecting a 5.8% growth[21] - Long-term debt rose to $13,022 million as of September 30, 2025, up from $12,518 million at the end of 2024, indicating a 4.0% increase[21] - Total current liabilities increased to $3,687 million as of September 30, 2025, compared to $3,150 million at the end of 2024, a rise of 17.0%[21] - The company’s total common shareholders' equity increased to $10,907 million as of September 30, 2025, from $10,332 million at the end of 2024, a growth of 5.5%[21] - Cash and cash equivalents increased to $209 million at the end of Q3 2025, compared to $177 million at the end of Q3 2024[27] - Cash and cash equivalents as of September 30, 2025, totaled $166 million, an increase from $127 million as of September 30, 2024[38] Capital Expenditures and Investments - The company reported capital expenditures of $2,078 million for the nine months ended September 30, 2025, compared to $1,962 million in the same period of 2024[27] - The company plans to invest approximately $3.2 billion in growth strategies in 2025, with $2.2 billion already invested in the first nine months of 2025[185] - The Company closed on ten acquisitions of various regulated water and wastewater systems for a total aggregate purchase price of $29 million, adding approximately 11,000 customers[70] - As of September 30, 2025, the company had entered into 24 agreements for pending acquisitions in the Regulated Businesses, totaling $572 million, expected to add approximately 98,000 customers[186] Revenue Increases from Rate Cases - The total general rate case authorizations for 2025 amount to $232 million, with significant contributions from Illinois ($105 million) and Missouri ($63 million) increases[43] - The Illinois subsidiary received a $105 million annualized increase in water and wastewater system revenues effective January 1, 2025, driven by $557 million in capital investments[207] - The Missouri subsidiary's general rate case approved a $63 million annualized increase in revenues, supported by $1.1 billion in capital investments[203] - The California subsidiary filed for a $63 million increase in water and wastewater rates for 2027-2029, driven by $750 million in planned capital investments[210] - The Kentucky subsidiary filed a general rate case requesting approximately $27 million in annualized incremental revenues, based on $212 million in capital investments[211] - The West Virginia subsidiary filed a general rate case requesting approximately $48 million in annualized incremental revenues, based on over $300 million in capital investments[212] Legal and Regulatory Matters - A total of four pending lawsuits have been filed against Mountaineer Gas and WVAWC related to natural gas service loss on November 10, 2023, alleging breach of contract and negligence[111] - The lawsuits seek class-wide damages for loss of use, property damage, and punitive damages, with claims including negligence and nuisance against both companies[112][113] - The Public Service Commission of West Virginia initiated investigations into the incidents, focusing on maintenance practices rather than the causes of the outages[119] - The Company has accrued approximately $16 million of probable loss contingencies related to legal actions[100] Tax Credits and Settlement Payments - The company qualified for $161 million in tax credits from the NJEDA, which will be received over a 10-year period starting from 2019[36] - The company expects to receive final NJEDA approval for the 2024 tax credits in 2026, with the filing currently under review[37] - As of September 30, 2025, Cal Am has received settlement payments totaling $135 million from 3M Company related to PFAS litigation, with plans to seek regulatory approval to benefit customers[142] - The Company anticipates additional settlement payments from defendants during the remainder of 2025[193] Interest and Financing Costs - Interest expense for the three months ended September 30, 2025, was $158 million, compared to $132 million in the same period of 2024, reflecting an increase of 19.7%[173] - The company’s interest expense for the nine months ended September 30, 2025, was $453 million, compared to $387 million in 2024, indicating a rise in financing costs[216] - The company had short-term debt consisting of commercial paper borrowings totaling $1,005 million, with a weighted-average interest rate of approximately 4.26%[91] Other Comprehensive Income - The company’s comprehensive income for the quarter ended September 30, 2025, included a net other comprehensive loss of $1 million[28] - The accumulated other comprehensive loss was $4 million, a decrease from $8 million as of September 30, 2024[76] - The company’s net other comprehensive income (loss) for the nine months ended September 30, 2025, was a loss of $8 million[82]

Core Insights - The American Water Charitable Foundation awarded a $35,000 Workforce Readiness grant to the North Scott Community School District to support the Regional Innovation Center, which aids high school students in communities served by Iowa American Water [1][2][3] Grant Details - The grant is part of the Keep Communities Flowing Grant Program, which focuses on career readiness, financial literacy, positive youth development, and life skills training [2][8] - The funding will enhance STEM programs, particularly the robotics team at North Scott High School, providing necessary resources for hands-on learning [2][3] Organizational Impact - Since 2012, the American Water Charitable Foundation has invested over $20 million in grants and matching gifts to support eligible organizations in communities served by American Water [3][8] - Iowa American Water emphasizes the importance of investing in youth and workforce training to create meaningful change and stronger communities [3][4] Company Overview - American Water is the largest regulated water and wastewater utility company in the U.S., serving over 14 million people across 14 states and 18 military installations [5][7] - Iowa American Water, a subsidiary of American Water, is the largest regulated water utility in Iowa, providing services to approximately 227,000 people [7]

Company Overview - Automatic Data Processing (ADP) provides payroll and HR services to over 1.1 million clients globally, including corporations, government entities, and small businesses [4] - The company has demonstrated strong client retention with a rate of 92.1%, close to its all-time high of 92.2% [1] Financial Performance - In the last quarter, ADP reported a 9.8% increase in earnings and a 7.5% rise in revenues [1] - Over the past decade, ADP has returned $30 billion to shareholders through dividends and share repurchases, while nearly tripling its dividend [2] - Revenue has nearly doubled from $10.9 billion to $20.6 billion over the last 10 fiscal years [3] Investment Appeal - ADP is recognized as a "Dividend King" with 50 consecutive years of dividend increases, indicating a strong commitment to returning value to shareholders [2] - The company’s business model is characterized as stable and essential, making it less susceptible to market volatility [10] - The current price-to-earnings ratio of ADP is competitive compared to the S&P 500 average, suggesting it may be an attractive investment opportunity [13]

Core Points - New Jersey American Water has commenced construction on a new operations center in Washington, New Jersey, representing a significant investment in infrastructure and service reliability for local communities [1][2] - The new facility will be 22,517 square feet and is designed to accommodate local employees while allowing for future growth, with construction expected to be completed by December 2026 [2] - The company has a long-standing commitment to community support, having engaged in various volunteer activities and local event sponsorships over the past decade [3][4] - The new operations center will contribute approximately $95,000 annually in property taxes to Washington Borough and will continue to serve over 31,000 customers in the region [4] Company Overview - American Water is the largest regulated water and wastewater utility company in the United States, serving over 14 million people across 14 states and 18 military installations [5] - New Jersey American Water, a subsidiary of American Water, is the largest regulated water utility in New Jersey, providing services to approximately 2.9 million people [7]

Core Points - The American Water Charitable Foundation has awarded $40,400 in grants to support the installation of bottle filling stations [1] - A total of 12 eligible public charities and school districts will benefit from the funding through the Hydration Station Grant Program [1] - The initiative aims to enhance access to clean drinking water in various communities [1]