American Water Works Q4 Earnings Miss Estimates, Revenues Beat

Core Insights - American Water Works Company (AWK) reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.24, missing the Zacks Consensus Estimate of $1.28 by 3.1% but showing a 7.8% increase from $1.15 in the same quarter last year [1] - Total revenues for AWK in the fourth quarter reached $1.27 billion, exceeding the Zacks Consensus Estimate of $1.22 billion by 3.9% and reflecting a 5.8% increase from $1.2 billion year-over-year [2] - The company’s total revenues for 2025 were $5.14 billion, up from $4.68 billion in 2024, primarily due to authorized revenue increases from completed rate cases and infrastructure investments [2] Financial Performance - AWK's total operating expenses for Q4 were $866 million, an increase of 8.1% from $801 million in the previous year, driven by higher employee-related costs and production costs [4] - Operating income for the fourth quarter was $405 million, a slight increase of 1.3% from $400 million year-over-year [4] - Cash flow from operating activities in 2025 was $2.06 billion, compared to $2.05 billion in the previous year [5] Segment Performance - Regulated businesses' net revenues in 2025 were $4.7 billion, reflecting a year-over-year increase of 10.3% [3] - Other segments reported net revenues of $417 million in 2025, up 7.5% year-over-year [3] Long-Term Guidance - AWK affirmed its 2026 EPS guidance in the range of $6.02-$6.12, with the Zacks Consensus Estimate at the high end of this range [9] - The company plans to invest $3.7 billion in 2026 and expects long-term EPS growth of 7-9% and rate base growth of 8-9% [8][9] - For the long-term capital expenditure plan, AWK anticipates investments of $19-$20 billion from 2026 to 2030 and $46-$48 billion from 2026 to 2035 [10] Merger Update - On February 10, 2026, shareholders of American Water and Essential Utilities approved their merger-related proposals [6]