Core Insights - American Water Works Company (AWK) reported second-quarter 2025 operating earnings per share (EPS) of $1.48, slightly below the Zacks Consensus Estimate of $1.49, but up 4.2% from $1.42 in the same quarter last year [1][7] - Total revenues for the quarter reached $1.27 billion, exceeding the Zacks Consensus Estimate of $1.15 billion by 10.6% and representing an 11% increase from $1.14 billion year-over-year [2][7] Revenue and Segment Performance - Regulated businesses generated net revenues of $1.17 billion, reflecting an 11.4% year-over-year increase, while other segments contributed $92 million, up 6.5% year-over-year [3] - Total operating expenses increased to $787 million, a 12.4% rise from $700 million in the previous year, primarily due to higher operating and maintenance costs [3] Growth and Acquisitions - AWK expanded its customer base by adding 7,600 customers through seven completed acquisitions as of June 30, 2025, with 20 additional pending acquisitions expected to add 40,650 customers [4] - New rates implemented on January 1, 2025, are projected to increase revenues by $270 million for the full year, with pending rate cases potentially adding another $126 million if approved [4] Financial Position - As of June 30, 2025, cash and cash equivalents stood at $94 million, with total liquidity of $1.17 billion, sufficient to meet near-term obligations [5] - Total long-term debt decreased to $12.28 billion, down 1.9% from $12.51 billion at the end of 2024 [5] Cash Flow and Investment - Cash flow from operating activities for the first half of 2025 was $632 million, compared to $727 million in the same period last year, with $1.3 billion invested to strengthen operations [6] Guidance and Long-Term Outlook - AWK narrowed its 2025 EPS guidance to a range of $5.70-$5.75, with the Zacks Consensus Estimate at $5.71, slightly below the midpoint of the guidance [7] - The company reaffirmed its long-term earnings and dividend growth target of 7-9% and plans to invest nearly $3.3 billion in 2025, with capital expenditures projected at $17-$18 billion for 2025-2029 and $40-$42 billion for 2025-2034 [8]

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q2 2025 were $1.48, up from $1.42 in Q2 2024, while year-to-date EPS was $2.53, compared to $2.37 in the same period of 2024 [5][11] - The company expects to achieve the top half of its initial EPS guidance range for 2025, now narrowed to $5.7 to $5.75 per share [6][17] - Total debt to capital ratio was 58%, within the target of less than 60% [18] Business Line Data and Key Metrics Changes - The company invested $1.3 billion in capital projects year-to-date, reflecting strong execution by teams [6][20] - Operating and maintenance costs increased by $0.17 per share, primarily due to employee-related expenses and technology costs [10][11] Market Data and Key Metrics Changes - Revenue increases were driven by authorized rate increases and organic customer growth, with a revenue increase of $0.50 per share year-over-year [9][11] - Weather had an unfavorable impact estimated at $0.06 per share due to wet conditions in 2025 [10] Company Strategy and Development Direction - The company aims for long-term earnings and dividend growth of 7% to 9%, supported by a capital growth plan focused on water and wastewater infrastructure [8][18] - The company is pursuing acquisitions to expand its customer base, with 87,000 customer connections under agreement totaling over $500 million [7][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving consistent EPS growth within the 7% to 9% range through 2029 and beyond [18] - The company noted strong customer usage and regulatory execution as key drivers of performance in 2025 [17][53] Other Important Information - The company has several active rate cases in progress across multiple jurisdictions, including West Virginia and California, seeking significant revenue increases [12][15] - A decoupling bill related to water utilities has passed out of the California Senate and is awaiting action in the Assembly [16][44] Q&A Session Summary Question: How is the company managing stakeholder relationships in Pennsylvania ahead of the next rate case? - Management has been actively engaging with stakeholders and providing excellent customer service to maintain positive relationships [25][26] Question: Is the company considering forward equity issuance for 2026 needs? - The company is evaluating all options but plans to issue equity in 2026 [27][28] Question: What is the earnings potential of the Nexus acquisition compared to municipal M&A? - The Nexus acquisition is seen as a strategic opportunity to expand the customer base in existing states, with no expected negative impact on profitability [31][32][35] Question: What is the landscape for fair market value deals in Pennsylvania? - The company anticipates more fair market value deals and is actively managing a pipeline of acquisitions [37][41] Question: Can you elaborate on the decoupling bill in California? - The bill aims to facilitate full decoupling for California water utilities, pending further legislative approval [43][46]

Financial Data and Key Metrics Changes - Earnings per share (EPS) for Q2 2025 were $1.48, up from $1.42 in Q2 2024, while year-to-date EPS was $2.53, an increase from $2.37 in the same period of 2024 [5][11] - The company expects to achieve the top half of its initial EPS guidance range for 2025, now narrowed to $5.7 to $5.75 per share [6][16] - Total debt to capital ratio was 58%, within the target of less than 60% [17] Business Line Data and Key Metrics Changes - Consolidated revenues increased by $0.50 per share due to authorized rate increases and organic customer growth [9] - Operating and maintenance (O&M) costs rose by $0.17 per share, primarily due to employee-related expenses and technology costs [10] - Capital investments totaled $1.3 billion year-to-date, with a goal of approximately $3.3 billion for 2025 [19] Market Data and Key Metrics Changes - The company reported unfavorable weather impacts estimated at $0.06 per share year-over-year, with wet weather in 2025 affecting revenues [10][11] - The company has 87,000 customer connections under agreement, totaling over $500 million across its business development platform [6][20] Company Strategy and Development Direction - The company aims for long-term earnings and dividend growth of 7% to 9%, driven by 8% to 9% rate base growth [7][17] - The acquisition of NEXUS Water Group systems is expected to add nearly 47,000 customer connections and approximately $200 million to the rate base [6][20] - The company is pursuing regulatory execution and infrastructure investments to enhance shareholder returns [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving consistent EPS growth within the 7% to 9% range through 2029 and beyond [17] - The company anticipates continued revenue increases year-over-year in several states through Q3 2025 [16] - Management highlighted the importance of stakeholder relationships in Pennsylvania ahead of the next rate case application [25][26] Other Important Information - The company has filed general rate cases in multiple jurisdictions, including West Virginia, Kentucky, and California, seeking additional annual revenue [12][14][15] - A decoupling bill related to water utilities has passed out of the California Senate and is awaiting action in the Assembly [15][46] Q&A Session Summary Question: How is the company managing stakeholder relationships in Pennsylvania? - The company has been actively engaging with stakeholders and providing excellent customer service to maintain positive relationships ahead of the next rate case application [25][26] Question: Is the company considering forward issuance for equity needs in 2026? - The company is evaluating all options for equity issuance but plans to issue equity in 2026 [28] Question: What is the earnings power of the Nexus acquisition compared to municipal M&A? - The Nexus acquisition is seen as a strategic opportunity to expand the customer base in existing service areas, with no expected negative impact on profitability [32][36] Question: What is the landscape for fair market value deals in Pennsylvania? - The company expects more fair market value deals to emerge, indicating ongoing consolidation needs in the region [42] Question: What are the goals of the decoupling bill in California? - The bill aims to close gaps in the regulatory framework for decoupling, with hopes for it to pass through the legislature [46][47] Question: What drove the strength in 2025 guidance? - Strong customer usage and consistent regulatory execution were the primary drivers for the improved guidance [53][54]

Financial Performance & Guidance - 2025 YTD EPS reached $2.53, driven by increased revenue from higher rate base and rate case outcomes, showing a 9.4% increase compared to 2024 on a weather-normalized basis[12] - The company narrowed its 2025 EPS guidance to the top half of the range, now expecting $5.70 to $5.75, reflecting an 8.6% EPS growth at the midpoint on a weather-normalized basis[9, 27, 28, 29] - The company affirms long-term financial targets of 7-9% EPS growth and 7-9% dividend per share growth, with a dividend payout ratio target of 55-60% and a debt to capital ratio of less than 60%[13, 15] - The company's projected dividend payout ratio for 2025 is 58%, based on projected cash dividends per share of $3.2475 and EPS guidance midpoint of $5.625, excluding $0.10 incremental interest from amended HOS seller note[56, 57] Capital Investments & Acquisitions - The company invested $1.3 billion in infrastructure improvements and acquisitions through June 30, 2025[12] - The company agreed to purchase Nexus Water Group systems in eight states for $315 million, adding nearly 47,000 customers[12] - The company anticipates ~$1 billion of capital expenditure related to PFAS treatment and up to ~$50 million annually for operating expenses in its 2025-2029 plan[71] Regulatory & Rate Cases - New rates became effective in 2025 in IL, CA, TN, VA, IN, MO, and IA; general cases were filed in KY, WV, and CA[12] - The company completed rate filings that are effective since January 1, 2025, which are expected to generate $232 million in additional annualized revenue from rate cases and $38 million from infrastructure charges, totaling $270 million[82, 83, 86] - The company has pending rate case filings requesting a total revenue increase of $123 million and pending infrastructure surcharges filings requesting $3 million, totaling $126 million[88]

Core Insights - American Water Works (AWK) reported quarterly earnings of $1.48 per share, slightly missing the Zacks Consensus Estimate of $1.49 per share, but showing an increase from $1.42 per share a year ago, resulting in an earnings surprise of -0.67% [1] - The company achieved revenues of $1.28 billion for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 10.54% and up from $1.15 billion year-over-year [2] - American Water Works has outperformed the S&P 500, with shares increasing by approximately 13.2% since the beginning of the year compared to the S&P 500's gain of 8.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.89 on revenues of $1.32 billion, and for the current fiscal year, it is $5.71 on revenues of $4.88 billion [7] - The estimate revisions trend for American Water Works was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Utility - Water Supply industry, to which American Water Works belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [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]

[Q2 2025 Earnings Release](index=1&type=section&id=Q2%202025%20Earnings%20Release) [Performance Highlights and Outlook](index=1&type=section&id=Performance%20Highlights%20and%20Outlook) American Water reported strong Q2 2025 diluted EPS of $1.48, narrowed 2025 EPS guidance to $5.70-$5.75, affirmed long-term growth targets, and progressed on capital investments and acquisitions Q2 & YTD 2025 Earnings Per Share (EPS) | Period | 2025 Diluted EPS | 2024 Diluted EPS | Change | | :--- | :--- | :--- | :--- | | **Second Quarter** | $1.48 | $1.42 | +$0.06 | | **Year-to-Date** | $2.53 | $2.37 | +$0.16 | 2025 EPS Guidance (Weather-Normalized) | Guidance | Range | | :--- | :--- | | **Previous** | $5.65 - $5.75 | | **Narrowed** | $5.70 - $5.75 | - The company affirmed its long-term financial targets, including an EPS and dividend growth rate of **7-9%**[5](index=5&type=chunk) - Announced an agreement to purchase Nexus Water Group systems, adding to its acquisition growth strategy. As of July 30, 2025, the company has approximately **87,000 customer connections** under agreement in total[4](index=4&type=chunk)[6](index=6&type=chunk) - The 2025 capital investment plan of **$3.3 billion** is on track, with **$1.3 billion** invested through June 30, 2025[6](index=6&type=chunk)[8](index=8&type=chunk) [Financial and Operational Review](index=3&type=section&id=Financial%20and%20Operational%20Review) The company's financial and operational performance for Q2 and H1 2025 is reviewed, highlighting revenue growth drivers, increased expenses, and the latest dividend declaration [Consolidated Results](index=3&type=section&id=Consolidated%20Results) Consolidated EPS for Q2 2025 increased to $1.48, driven by new rates in Regulated Businesses, partially offset by higher operating and financing costs, with a $0.06 unfavorable weather impact - Growth was primarily driven by increased revenues from new rates in the Regulated Businesses, offset by higher operating, depreciation, and financing costs[7](index=7&type=chunk) - Weather had an estimated net unfavorable impact of **$0.06 per share** for the six months ended June 30, 2025, compared to the same period in 2024[7](index=7&type=chunk) - The company invested **$1.3 billion** in the first six months of 2025, on track to meet its full-year capital plan of approximately **$3.3 billion**[8](index=8&type=chunk) [Regulated Businesses Performance](index=3&type=section&id=Regulated%20Businesses%20Performance) The Regulated Businesses segment reported increased net income for Q2 and H1 2025, driven by authorized rate increases, partially offset by higher operating, depreciation, and interest expenses Regulated Businesses Net Income (in millions) | Period | 2025 Net Income | 2024 Net Income | | :--- | :--- | :--- | | **Second Quarter** | $288 | $274 | | **First Six Months** | $489 | $459 | - Operating revenues increased by **$121 million** for Q2 and **$242 million** for the first six months of 2025, mainly due to authorized revenue increases from rate cases and infrastructure proceedings[10](index=10&type=chunk) - Since January 1, 2025, the company has been authorized additional annualized revenues of **$270 million** and has pending requests for an additional **$126 million**[11](index=11&type=chunk) - Operating expenses rose by **$83 million** for Q2 and **$161 million** for the first six months, driven by employee costs, technology, taxes, and depreciation. Interest expense also increased due to debt used to fund capital investments[12](index=12&type=chunk)[13](index=13&type=chunk) [Dividends](index=3&type=section&id=Dividends) The Board of Directors declared a quarterly cash dividend of $0.8275 per share, payable on September 3, 2025, to shareholders of record as of August 12, 2025 Quarterly Dividend Declaration | Metric | Value | | :--- | :--- | | **Dividend per Share** | $0.8275 | | **Record Date** | August 12, 2025 | | **Payment Date** | September 3, 2025 | [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the unaudited consolidated Statements of Operations and Balance Sheets as of June 30, 2025, detailing the company's financial performance and position [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, operating revenues increased to $2,418 million, leading to higher operating income and net income attributable to common shareholders Consolidated Statements of Operations Highlights (Six Months Ended June 30, in millions) | Account | 2025 | 2024 | | :--- | :--- | :--- | | **Operating revenues** | $2,418 | $2,160 | | **Operating income** | $860 | $775 | | **Net income attributable to common shareholders** | $494 | $462 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $33,913 million, driven by property, plant, and equipment growth, with total common shareholders' equity rising to $10,682 million Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total assets** | $33,913 | $32,830 | | Property, plant and equipment, net | $28,932 | $28,038 | | **Total liabilities** | $21,631 | $20,977 | | Long-term debt | $12,281 | $12,521 | | **Total common shareholders' equity** | $10,682 | $10,332 | [Corporate Information and Forward-Looking Statements](index=3&type=section&id=Corporate%20Information%20and%20Forward-Looking%20Statements) This section provides general corporate information, details for the earnings conference call, and a cautionary statement regarding forward-looking statements and associated risks [About American Water](index=4&type=section&id=About%20American%20Water) American Water is the largest regulated water and wastewater utility in the United States, serving over 14 million people across 14 states and 18 military installations - American Water is the largest regulated water and wastewater utility in the U.S., serving over **14 million people**[17](index=17&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) The Q2 2025 earnings conference call is scheduled for July 31, 2025, at 9 a.m. ET, with an audio webcast and presentation slides available on the investor relations website - The Q2 2025 earnings conference call is scheduled for July 31, 2025, at **9 a.m. ET**, with a webcast available at ir.amwater.com[15](index=15&type=chunk) [Cautionary Statement Concerning Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Concerning%20Forward-Looking%20Statements) This section cautions that forward-looking statements, including earnings guidance and growth targets, are subject to significant risks and uncertainties, advising readers to consult SEC filings for comprehensive risk factors - Forward-looking statements regarding guidance, growth targets, and capital expenditures are not guarantees of future performance and are subject to significant risks and uncertainties[19](index=19&type=chunk) - Key risks include regulatory decisions, changes in customer demand, weather events, infrastructure challenges, cybersecurity threats, and changes in economic conditions[19](index=19&type=chunk)[20](index=20&type=chunk)

[Part I. Financial Information](index=7&type=section&id=Part%20I.%20Financial%20Information) This section covers the company's consolidated financial statements, management's discussion, market risk, and internal controls [Item 1. Consolidated Financial Statements](index=7&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for American Water Works Company, Inc. as of June 30, 2025, and for the three and six-month periods then ended [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $33.91 billion, an increase from $32.83 billion at year-end 2024, primarily driven by a rise in net property, plant, and equipment Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$33,913** | **$32,830** | | Property, plant and equipment, net | $28,932 | $28,038 | | Total current assets | $1,399 | $1,215 | | **Total Liabilities** | **$23,231** | **$22,498** | | Long-term debt (including current portion) | $13,397 | $13,155 | | Short-term debt | $1,589 | $879 | | **Total Common Shareholders' Equity** | **$10,682** | **$10,332** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, operating revenues increased to $2.42 billion from $2.16 billion year-over-year, with net income attributable to common shareholders rising to $494 million Statement of Operations Summary (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $1,276 | $1,149 | $2,418 | $2,160 | | Operating Income | $489 | $449 | $860 | $775 | | Net Income Attributable to Common Shareholders | $289 | $277 | $494 | $462 | | Diluted Earnings Per Share | $1.48 | $1.42 | $2.53 | $2.37 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities was $632 million, while net cash used in investing activities was $1.34 billion, resulting in a net decrease in cash of $5 million Cash Flow Summary for the Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $632 | $727 | | Net cash used in investing activities | $(1,340) | $(1,471) | | Net cash provided by financing activities | $703 | $478 | | **Net decrease in cash, cash equivalents and restricted funds** | **$(5)** | **$(266)** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies, regulatory activities, acquisitions, debt structure, contingencies, and segment performance, including $232 million in annualized revenue from 2025 general rate cases [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for the second quarter and first half of 2025, highlighting that diluted EPS for the six months ended June 30, 2025, increased to $2.53 from $2.37 year-over-year, driven by new rates from capital investments - Diluted EPS for the six months ended June 30, 2025, was **$2.53**, up from **$2.37** in 2024, primarily driven by new rates in the Regulated Businesses, partially offset by an estimated unfavorable weather impact of **$0.06 per share**[178](index=178&type=chunk) - The company plans to invest approximately **$3.3 billion** in growth strategies in 2025, having invested **$1.3 billion** in Regulated Businesses for infrastructure and **$21 million** for acquisitions adding approximately **7,600 customers** in the first six months[179](index=179&type=chunk)[181](index=181&type=chunk) - On May 19, 2025, the Company entered into an agreement to acquire Nexus Regulated Utilities for approximately **$315 million** in cash, expected to add nearly **47,000 customer connections** and an estimated **$200 million in rate base**, with closing anticipated by or before August 2026[180](index=180&type=chunk)[182](index=182&type=chunk) - The company received an initial settlement payment of **$34 million (net)** from 3M Company related to the PFAS multi-district litigation, recorded as a regulatory liability for customer benefit pending PUC approval[139](index=139&type=chunk)[187](index=187&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Consolidated operating revenues for the six months ended June 30, 2025, increased by $258 million to $2.42 billion, primarily from authorized rate increases in the Regulated Businesses segment, partly offset by increased operating and depreciation expenses Regulated Businesses Revenue Change Drivers (Six Months Ended June 30, 2025 vs 2024) | Driver | Change (in millions) | | :--- | :--- | | Authorized Rate Increases (incl. surcharges) | +$213 | | Acquisitions and Organic Growth | +$25 | | Unfavorable Weather Impact | -$17 | | **Total Revenue Increase** | **~$242** | - Regulated Businesses' O&M expenses for the first six months of 2025 increased by **$94 million** year-over-year, driven by higher employee-related costs, technology-related services, production costs, and customer uncollectible expense[212](index=212&type=chunk) - Depreciation and amortization for the Regulated Businesses increased by **$57 million** for the six months ended June 30, 2025, due to additional utility plant placed in service and higher depreciation rates from recent rate cases[213](index=213&type=chunk) [Regulatory Matters](index=44&type=section&id=Regulatory%20Matters) In 2025, the company received authorizations for $232 million in annualized incremental revenues from general rate cases and $38 million from infrastructure surcharge mechanisms, with several general rate cases pending 2025 General Rate Case Authorizations (in millions) | State | Annualized Revenue | Effective Date | | :--- | :--- | :--- | | Illinois | $105 | Jan 1, 2025 | | Missouri | $63 | May 28, 2025 | | Indiana (Step) | $17 | May 14, 2025 | | California (Step) | $17 | Jan 1, 2025 | | Virginia | $15 | Feb 24, 2025 | | Iowa | $13 | Aug 1, 2025 | | Other | $2 | Various | | **Total** | **$232** | | - The company received authorizations for **$38 million** in annualized incremental revenues from infrastructure surcharges effective in 2025, with the largest amounts from New Jersey (**$15 million**) and Missouri (**$17 million**)[204](index=204&type=chunk) - Pending general rate cases include a request in California for a **$111 million** total increase over 2027-2029, a **$27 million** request in Kentucky, and a **$48 million** request in West Virginia[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had total available liquidity of $1.17 billion, down from $1.88 billion at year-end 2024, primarily due to increased commercial paper borrowings, while maintaining compliance with debt covenants Available Liquidity (in millions) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $94 | $96 | | Availability on Revolving Credit Facility | $1,075 | $1,788 | | **Total Available Liquidity** | **$1,169** | **$1,884** | - Cash flows from operating activities decreased by **$95 million** for the first six months of 2025 compared to 2024, primarily due to a CAMT liability payment and higher customer receivables[243](index=243&type=chunk) - The company's debt-to-capitalization ratio was **0.58 to 1.00** as of June 30, 2025, well within the covenant requirement of not more than **0.70 to 1.00**[248](index=248&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that it is exposed to market risks, including changes in commodity prices, equity prices, and interest rates, with no significant changes since December 31, 2024 - There have been no significant changes to the Company's exposure to market risk since December 31, 2024[255](index=255&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting identified - The CEO and CFO concluded that as of June 30, 2025, the Company's disclosure controls and procedures were effective at a reasonable level of assurance[257](index=257&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[258](index=258&type=chunk) [Part II. Other Information](index=57&type=section&id=Part%20II.%20Other%20Information) This section provides updates on legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and a list of exhibits [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) This section provides updates on key legal matters, including a denied petition challenging the coastal development permit for the Water Supply Project, preliminary court approval for a class action settlement, and a $34 million initial settlement payment related to PFAS litigation - Regarding the Monterey Peninsula Water Supply Project, a court denied a petition challenging the coastal development permit, and the CPUC authorized an **$11 million** increase to the cost cap for certain extraction wells[261](index=261&type=chunk)[263](index=263&type=chunk) - A proposed class action settlement agreement in the Dunbar, West Virginia litigation received preliminary court approval on May 5, 2025, with a final approval hearing scheduled for September 11, 2025[266](index=266&type=chunk) - As of June 30, 2025, the Company received an initial settlement payment of **$34 million (net)** from 3M Company in the PFAS multi-district litigation, with additional payments anticipated in 2025[267](index=267&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes from the risk factors that were previously disclosed in its Annual Report on Form 10-K - There have been no material changes from the risk factors previously disclosed in the Company's Form 10-K[268](index=268&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On May 28, 2025, the company issued 48,381 shares of common stock from treasury stock as consideration for the acquisition of Audubon Water Company, and did not repurchase any shares during the quarter - The Company issued **48,381 shares** of its common stock on May 28, 2025, as consideration for the acquisition of Audubon Water Company[269](index=269&type=chunk) - No common stock was repurchased during the three months ended June 30, 2025, with an aggregate of **5,140,000 shares** remaining available for repurchase under the anti-dilutive stock repurchase program[271](index=271&type=chunk) [Item 3. Defaults Upon Senior Securities](index=58&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[272](index=272&type=chunk) [Item 4. Mine Safety Disclosures](index=58&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[273](index=273&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading plan or any non-Rule 10b5-1 trading arrangement - During the three months ended June 30, 2025, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements[274](index=274&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements related to acquisitions, debt instruments, compensation plans, and certifications by the CEO and CFO

Core Viewpoint - American Water Works (AWK) is expected to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with a consensus outlook indicating potential stock price movements based on actual results compared to estimates [1][2]. Earnings Expectations - The consensus estimate for quarterly earnings is $1.49 per share, reflecting a year-over-year increase of +4.9% [3]. - Expected revenues are projected at $1.15 billion, which is an increase of 0.5% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.13% lower in the last 30 days, indicating a reassessment by analysts [4]. - The direction of estimate revisions may not always align with the aggregate change, suggesting variability in analyst sentiment [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for American Water Works is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.67% [11]. - The company holds a Zacks Rank of 2, suggesting a strong likelihood of beating the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, American Water Works had an earnings surprise of +0.96%, reporting $1.05 per share against an expectation of $1.04 [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Conclusion - American Water Works is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors influencing stock performance beyond earnings results [16].

Core Insights - American Water Works (AWK) has consistently surpassed earnings estimates, making it a strong candidate for future investment opportunities [1][5] - The company reported earnings of $1.05 per share for the last quarter, exceeding the Zacks Consensus Estimate of $1.04 per share by 0.96% [2] - In the previous quarter, AWK's earnings were $1.22 per share against an expectation of $1.13, resulting in a surprise of 7.96% [2] Earnings Performance - Over the last two quarters, American Water Works has averaged a 4.46% earnings surprise [1] - The company's positive Earnings ESP (Expected Surprise Prediction) stands at +1.84%, indicating bullish sentiment among analysts regarding its near-term earnings potential [8] - The next earnings report for American Water Works is anticipated on July 30, 2025 [8] Zacks Rank and Predictive Metrics - American Water Works holds a Zacks Rank of 2 (Buy), which, when combined with its positive Earnings ESP, suggests a high likelihood of another earnings beat [8] - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [7]

Core Viewpoint - The article highlights S&P 500 dividend stocks that have experienced significant price declines, presenting them as attractive buying opportunities for long-term investors due to their strong fundamentals and consistent dividend growth. Group 1: Overview of Dividend Stocks - Dividend stocks are powerful wealth compounders, with the S&P 500 index showing over 300% growth in the past 25 years, and total returns exceeding 550% when including reinvested dividends [1] - The article identifies 10 S&P 500 dividend stocks that are currently trading at least 10% below their all-time highs, suggesting they are good buys for long-term holding [2] Group 2: Individual Stock Analysis - **Johnson & Johnson**: Down 11.5%, yield 3.4%, generated $95 billion in free cash flow over five years, returning 60% to shareholders, and has increased dividends for 62 consecutive years [4] - **ExxonMobil**: Down 11.6%, yield 3.7%, generated $55 billion in cash flow from operations in 2024, with a 42-year streak of dividend increases, and focusing on boosting cash flows post-acquisition of Pioneer Natural Resources [5] - **Procter & Gamble**: Down 14%, yield 2.7%, restructuring operations to target mid- to high-single-digit core earnings per share growth, and has increased dividends for 69 consecutive years [6][7] - **NextEra Energy**: Down 19%, yield 3.3%, operates the largest electric utility in America and is the largest producer of wind and solar energy, with over 20 years of dividend increases [8] - **Chevron**: Down 19%, yield 4.8%, has increased dividends for 38 consecutive years, and recently acquired Hess in a $53 billion deal [10] - **American Water Works**: Down 24%, yield 2.4%, serves over 14 million customers, targeting 7% to 9% annual dividend growth [11][13] - **Realty Income**: Down 29%, yield 5.6%, pays monthly dividends and has increased them for 110 consecutive quarters, owning over 15,000 properties [14] - **Oneok**: Down 29%, yield 5%, has a network of pipelines spanning 60,000 miles, targeting 3% to 4% annual dividend growth [15] - **Nucor**: Down 30%, yield 1.7%, America's largest steel company, has increased dividends for 52 straight years, and aims to return at least 40% of earnings to shareholders [16] - **Medtronic**: Down 33%, yield 3.3%, world's largest medical device manufacturer with $33.5 billion in revenue, plans to divest its diabetes business, and is close to becoming a Dividend King [18]