Core Insights - American Water Works (AWK) reported quarterly earnings of $1.22 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, and up from $0.88 per share a year ago, representing an earnings surprise of 7.96% [1] - The company posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 11.40%, compared to $1.03 billion in the same quarter last year [2] - The stock has gained approximately 2.2% since the beginning of the year, while the S&P 500 has increased by 4.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.06 on revenues of $1.03 billion, and for the current fiscal year, it is $5.70 on revenues of $4.73 billion [7] - The estimate revisions trend for American Water Works is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Utility - Water Supply industry is currently in the top 36% of over 250 Zacks industries, suggesting that stocks in the top 50% of Zacks-ranked industries outperform those in the bottom 50% by more than 2 to 1 [8] - SJW, another company in the same industry, is expected to report quarterly earnings of $0.55 per share, reflecting a year-over-year decline of 6.8%, with revenues projected at $175.92 million, up 2.7% from the previous year [9]

Financial Performance - American Water reported Q4 2024 earnings of $1.22 per share, up from $0.88 per share in Q4 2023, and full-year earnings of $5.39 per share compared to $4.90 per share in 2023, reflecting an 8.6% year-over-year increase when excluding certain interest income[3][6] - Operating revenues increased by $132 million and $376 million for Q4 and full-year 2024, respectively, primarily due to authorized revenue increases from completed general rate cases[10] - The Regulated Businesses' net income for Q4 2024 was $250 million, compared to $188 million in Q4 2023, and full-year net income was $1.1 billion, up from $971 million in 2023[9] - Net income attributable to common shareholders for Q4 2024 was $239 million, a 39.9% increase from $171 million in Q4 2023[29] - Basic earnings per share for Q4 2024 were $1.22, compared to $0.88 in Q4 2023, reflecting a 38.6% increase[29] - The company reported a total operating income of $400 million for Q4 2024, up 33.8% from $299 million in Q4 2023[29] Revenue and Investment - The company invested $3.3 billion in capital in 2024, focusing on infrastructure renewal and completing 13 acquisitions that added nearly 70,000 customers, achieving a 2% annual growth target[4][8] - The company has been authorized additional annualized revenues of approximately $389 million from general rate cases, with $283 million effective in 2024 and $106 million effective in 2025[11] - Operating revenues for Q4 2024 were $1,201 million, up 16.4% from $1,032 million in Q4 2023[29] Expenses and Liabilities - Operating expenses increased by $30 million and $169 million for Q4 and full-year 2024, respectively, primarily due to higher employee-related costs and increased production costs[12] - Total operating expenses for Q4 2024 were $801 million, an increase of 9.3% from $733 million in Q4 2023[29] - Current liabilities increased significantly to $3,150 million in December 2024, up from $2,151 million in December 2023, marking an increase of 46.4%[31] - Long-term debt rose to $12,518 million in December 2024, compared to $11,715 million in December 2023, reflecting an increase of 6.9%[31] Shareholder Returns - American Water delivered an 8.1% dividend growth for the year, with a quarterly cash dividend of $0.7650 per share declared for March 2025[14] - The company affirmed its 2025 EPS guidance range of $5.65 to $5.75, which includes approximately $0.10 per share of incremental interest income[6] - American Water's long-term financial targets include an EPS and dividend growth rate of 7-9%[6] Leadership and Strategy - CEO M. Susan Hardwick will retire on May 14, 2025, with John Griffith set to succeed her, continuing the company's leadership in the water utility sector[15][17] - The company anticipates continued growth through strategic acquisitions and capital expenditures, although specific projections were not detailed[25] - The company is focused on enhancing its infrastructure and technology to improve operational efficiency and service delivery[25] Asset and Equity Growth - Property, plant, and equipment increased to $35,059 million as of December 31, 2024, from $32,189 million a year earlier[30] - Total assets rose to $32,830 million as of December 31, 2024, compared to $30,298 million as of December 31, 2023[30] - Total common shareholders' equity increased to $10,332 million in December 2024, up from $9,797 million in December 2023, representing a growth of 5.5%[31] - Retained earnings increased to $2,112 million in December 2024, up from $1,659 million in December 2023, showing a growth of 27.2%[31] - Total capitalization grew to $22,853 million in December 2024, compared to $21,515 million in December 2023, indicating a rise of 6.2%[31] Regulatory and Construction Contributions - Accrued taxes rose to $156 million in December 2024, compared to $67 million in December 2023, which is an increase of 132.8%[31] - Advances for construction increased to $383 million in December 2024, compared to $352 million in December 2023, reflecting an increase of 8.8%[31] - Contributions in aid of construction rose to $1,577 million in December 2024, up from $1,551 million in December 2023, indicating an increase of 1.7%[31] - Regulatory liabilities decreased slightly to $1,416 million in December 2024 from $1,481 million in December 2023, a decline of 4.4%[31]

Liquidity and Debt Management - The company relies on a $2.75 billion revolving credit facility and a $2.60 billion commercial paper program to meet liquidity needs[183]. - As of December 31, 2024, the company had $880 million of commercial paper outstanding and $82 million in outstanding letters of credit[183]. - The company’s consolidated debt cannot exceed 70% of its consolidated capitalization under the terms of its revolving credit facility[186]. - The company plans to issue a combination of short-term and long-term debt, as well as additional equity over the next five years to meet capital expenditure needs[187]. - In June 2023, American Water Capital Corp. issued $1,035 million of 3.625% Exchangeable Senior Notes due 2026, which may adversely affect liquidity if the conditional exchange feature is triggered[188]. Financial Risks - The company is exposed to interest rate risk due to its long-term debt strategy, which may affect financial condition and cash flows[181]. - The company may need to refinance existing debt or reduce capital investments if cash flows are insufficient to meet obligations[182]. - The company’s financial performance is influenced by external factors such as economic conditions and interest rate fluctuations[18]. - Market volatility may increase funding requirements for pension and postretirement benefit plans, affecting financial position and cash flows[193]. - Changes in accounting standards could materially impact how the company reports its financial results and condition[197]. Regulatory and Compliance Risks - The company faces risks related to regulatory decisions that could impact customer rates and capital investment[13]. - The company must comply with evolving environmental regulations, which may impact operational costs and strategies[15]. - The company’s operations are subject to risks associated with contracts with the U.S. government, including potential early termination and compliance issues[196]. Operational and Market Risks - The company is subject to various risks including changes in customer demand and limitations on water supply availability[13]. - The company’s ability to achieve operational growth projections is contingent on successful acquisitions and integration of regulated operations[15]. - The company faces risks related to employee misconduct, which could result in substantial liability and reputational harm[200]. - The company may face challenges in attracting and retaining skilled employees, which could adversely impact business operations and financial results[199]. Financial Condition and Commitments - As of December 31, 2024, the company had $1.1 billion of goodwill and $218 million of total assets measured at fair value, which may require future impairments affecting financial condition[192]. - The company has approximately $8.1 billion in remaining performance commitments related to contracts, with $1.2 billion guaranteed by the parent company, which may impact financial condition[194]. - The company’s ability to pay dividends is dependent on subsidiaries' ability to pay upstream dividends, which may be restricted by regulatory obligations[189].

American Water Works (AWK) is scheduled to release fourth-quarter 2024 results on Feb. 19, after market close. The company delivered a negative earnings surprise of 2.2% in the last reported quarter.See the Zacks Earnings Calendar to stay ahead of market-making news.Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.Major Factors That Might Have Impacted AWK's Q4 PerformanceIn October 2024, Pennsylvania American Water, a subsidiary of American Water Works, completed ...

American Water Works (AWK) shares ended the last trading session 6.8% higher at $129.95. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2.9% loss over the past four weeks.American Water Works has been investing regularly to upgrade and maintain its water and wastewater infrastructure. The company plans to invest $3.3 billion in 2025 to strengthen and expand its water and wastewater infrastructure and efficiently s ...

Donald Trump’s first week in the White House sent stocks on a rally after making a shaky start to the New Year. However, concerns over the economy continue to cloud investors’ sentiment related to high inflation and uncertainty over the Federal Reserve’s future rate cut plans. This saw consumer sentiment decline in January, the first time in six months.Given the ongoing uncertainty, it would be safe to invest in utility stocks, which are considered defensive, such as American Water Works Company, Inc. (AWK) ...

American Water Works Company Inc. (AWK) continues to expand operations through organic and inorganic initiatives. Rising earnings estimates, long-term investment plans and growth opportunities make AWK a solid investment option in the utility sector.Let us focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.AWK’s Earnings Projections & Growth RateThe Zacks Consensus Estimate for 2025 earnings per share (EPS) has moved up 0.2% in the past 90 days to $5.70.Th ...

Investing by equal parts in these three dividend stocks produces an average yield of 3%.Investors worried about a stock market sell-off may feel the urge to sell out of their positions and run for the exits. But long-term investors know that it's a mistake to overhaul your investing strategy based on emotion.A better approach is to ensure you are invested in companies that suit your risk tolerance and can help you achieve your investment objectives. Dividend stocks are a great way to generate passive income ...

In life and investing, consistency matters greatly. This is because wealth and success rarely come quickly. Even if it did, it's going to take commitment and dedication to maintain and build on that success.Hi, my name is Kody. Aside from my articles here on Seeking Alpha, I am also a regular contributor to TipRanks, Sure Dividend, and The Dividend Kings and iREIT+Hoya Capital. I have been investing since September 2017 and interested in dividend investing since about 2009.Since July 2018, I have ran Kody's ...

Water utilities work day in and day out to ensure an uninterrupted supply of clean, potable water and reliable sewer services to millions of customers in the United States. These are essential for healthy and hygienic living.The aging of pipelines is concerning, but water utilities continue with their upgrade and maintenance projects to minimize disruptions in operations. American Water Works Company (AWK) , with its widespread operations, provides services to domestic customers and military bases and offer ...