American Water Works Q3 Earnings Beat Estimates, Revenues Up Y/Y

Core Insights - American Water Works Company (AWK) reported Q3 2025 earnings per share (EPS) of $1.94, exceeding the Zacks Consensus Estimate of $1.90 by 2.1% and reflecting a 7.8% increase from the previous year's EPS of $1.80 driven by revenue and operating income growth [1][8] Total Revenues of AWK - AWK's total quarterly revenues reached $1.45 billion, surpassing the Zacks Consensus Estimate of $1.32 billion by 19.6% and marking a 9.8% increase from the year-ago figure of $1.32 billion, attributed to new rates in Regulated Businesses and acquisition investments [2][8] AWK's Segmental Details - Net revenues from regulated businesses were $1.34 billion, up 10.2% year over year, while revenues from other segments totaled $108 million, reflecting a 3.8% year-over-year increase [3] Highlights of AWK's Q3 Release - Total operating expenses for Q3 were $837 million, a 7.3% increase from $780 million in the prior year, driven by higher employee-related costs, technology expenses, and taxes related to capital investments [4] - Operating income totaled $614 million, up 13.1% from $543 million in the previous year [4] Financial Highlights of AWK - Cash and cash equivalents stood at $166 million as of September 30, 2025, compared to $96 million at the end of 2024 [6] - Total long-term debt increased to $13.02 billion as of September 30, 2025, up 4% from $12.51 billion at the end of 2024 [6] - Cash flow from operating activities for the first nine months of 2025 was $1.40 billion, slightly down from $1.41 billion in the same period of 2024 [6] Merger Announcement - AWK announced a merger agreement with Essential Utilities, Inc. on October 27, 2025, projected to create a leading regulated U.S. water and wastewater public utility with a pro forma enterprise value of approximately $63 billion [7][9] AWK's Long-Term Guidance - The company reiterated its 2025 EPS guidance in the range of $5.70 to $5.75, with a consensus estimate of $5.72 [10] - For 2026, AWK expects EPS in the range of $6.02 to $6.12, with a consensus estimate of $6.14 [10] - Long-term EPS and dividend growth are expected to be 7-9%, with rate base growth of 8-9% [11] - AWK plans to invest $19-$20 billion during 2026-2030 and $46-$48 billion during 2026-2035 [11]