American Water (AWK) Q4 Earnings Beat Estimates, '24 View Up

Core Insights - American Water Works Company (AWK) reported fourth-quarter 2023 operating earnings per share (EPS) of 88 cents, exceeding the Zacks Consensus Estimate of 84 cents by 4.8% and improving 8.6% from the previous year's earnings of 81 cents [1] - The company's total revenues for 2023 reached $4.2 billion, an increase of 11.7% from $3.8 billion in 2022, with quarterly revenues of $1.03 billion surpassing estimates by 7.6% [2] - AWK's 2024 EPS guidance has been raised to a range of $5.20-$5.30, indicating a positive outlook for future earnings growth [6] Financial Performance - The total operating expenses for Q4 2023 were $733 million, up 9.4% from $670 million in the same quarter last year, primarily due to increased operating and maintenance expenses [4] - Operating income for Q4 2023 was $299 million, reflecting a 14.6% increase from $261 million year-over-year, outperforming projections [4] - Cash flow from operating activities in 2023 was $1.87 billion, compared to $1.1 billion in the previous year [5] Segment Analysis - Revenues from regulated businesses in 2023 were $3.9 billion, up 11.8% year-over-year, driven by completed rate cases and infrastructure investments [3] - Other revenues for 2023 amounted to $314 million, an increase from $287 million in 2022 [3] Strategic Developments - The company has completed 23 acquisitions in eight states, adding 18,100 customers, with 25 pending acquisitions expected to add another 88,130 customers [4] - AWK has been authorized for additional annualized revenues of $359 million from rate increases and $31 million from infrastructure charges effective since the end of 2023 [4] Investment Outlook - The company plans to invest nearly $3.1 billion in 2024 and anticipates investments of $16-$17 billion and $34-$38 billion in the periods 2024-2028 and 2024-2033, respectively [6] - AWK maintains a long-term earnings and dividend growth target of 7-9% [6]