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American Water Works (AWK) Beats on Q3 Earnings, Ups Capex
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American Water Works Company (AWK - Free Report) posted third-quarter 2022 operating earnings per share (EPS) of $1.63, which surpassed the Zacks Consensus Estimate of $1.49 by 9.4%. The bottom line improved 6.5% from the year-ago earnings of $1.53 per share.
The year-over-year increase was primarily due to the implementation of new rates in the Regulated Businesses from infrastructure investments, somewhat offset by the impacts of inflationary pressures and higher interest costs.
Total Revenues
Total revenues of $1,082 million surpassed the Zacks Consensus Estimate of $1,019 million by 6.2%. The top line declined 0.9% from the year-ago figure of $1,092 million.
American Water Works Company, Inc. Price, Consensus and EPS Surprise
Regulated businesses’ revenues in the third quarter of 2022 were $1,003 million compared with $944 million in the year-ago quarter. Net income was $302 million, up 10.6% year over year.
Market-Based businesses’ revenues in the third quarter of 2022 were $79 million compared with $148 million in the year-ago period. A net loss of $5 million was reported in the third quarter of 2022 against net income of $5 million in the year-ago period.
Highlights of the Release
Total operating expenses for the third quarter amounted to $643 million, down 4.7% from the year-ago quarter’s $675 million due to a decrease in operating and maintenance expenses.
The operating income was $439 million, up 5.3% from the year-ago figure of $417 million. The new rates (effective from Jan 1, 2022) should boost annual revenues by $193 million and the pending rate case, if approved without any change, would further increase the top line by $458 million.
American Water Works continues to expand operations through acquisitions and organic means. Through nine closed acquisitions in four states, it added 79,300 customers to its base. AWK’s 29 pending acquisitions (as of Sep 30), when completed, would add another 21,600 customers.
In the first nine months of 2022, American Water Works invested $1.9 billion in infrastructure improvements to provide quality services to its expanding customer base.
Financial Highlights
Cash and cash equivalents amounted to $77 million as of Sep 30, 2022, down 38.8% from $116 million as of Dec 31, 2021.
The total long-term debt was $10,943 million as of Sep 30, 2022, up 6.6% from $10,344 million as of Dec 31, 2021.
Guidance
American Water Works affirmed the 2022 earnings guidance at $4.39-$4.49 per share. The Zacks Consensus Estimate for 2022 earnings of $4.44 per share is on par with the mid-point of the company’s guided range. AWK reiterated long-term earnings growth of 7-9%.
The company plans to invest nearly $2.5 billion across its footprint in 2022 and is on course to meet its expenditure plans. American Water Works has increased its 2023-2027 capital investment plan to $14-$15 billion and $30-$34 billion for the 10-year period of 2023-2032. Earlier, the company expected to invest $13-$14 billion in the 2022-2026 time period and $28-$32 billion during 2022-2031.
Zacks Rank
American Water Works currently carries a Zacks Rank #4 (Sell).
Essential Utilities Inc. (WTRG - Free Report) is slated to report third-quarter 2022 earnings on Nov 7, before the market opens. The Zacks Consensus Estimate for Essential Utilities’ third-quarter EPS is pegged at 23 cents.
The Zacks Consensus Estimate for WTRG’s 2022 earnings is pegged at $1.78 per share, implying year-over-year growth of 6.6%.
American States Water Co. (AWR - Free Report) is slated to report third-quarter 2022 earnings on Nov 7, after market close. The Zacks Consensus Estimate for American States Water’s third-quarter EPS is pegged at 70 cents.
The Zacks Consensus Estimate for AWR’s 2022 earnings is pegged at $2.52 per share, implying year-over-year growth of 2%.
Global Water Resources (GWRS - Free Report) is slated to report third-quarter 2022 earnings on Nov 10, before market open. The Zacks Consensus Estimate for Global Water Resources’ third-quarter EPS is pegged at 5 cents.
The Zacks Consensus Estimate for GWRS’ 2022 earnings is pegged at 20 cents per share, implying year-over-year growth of 25%.
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American Water Works (AWK) Beats on Q3 Earnings, Ups Capex
American Water Works Company (AWK - Free Report) posted third-quarter 2022 operating earnings per share (EPS) of $1.63, which surpassed the Zacks Consensus Estimate of $1.49 by 9.4%. The bottom line improved 6.5% from the year-ago earnings of $1.53 per share.
The year-over-year increase was primarily due to the implementation of new rates in the Regulated Businesses from infrastructure investments, somewhat offset by the impacts of inflationary pressures and higher interest costs.
Total Revenues
Total revenues of $1,082 million surpassed the Zacks Consensus Estimate of $1,019 million by 6.2%. The top line declined 0.9% from the year-ago figure of $1,092 million.
American Water Works Company, Inc. Price, Consensus and EPS Surprise
American Water Works Company, Inc. price-consensus-eps-surprise-chart | American Water Works Company, Inc. Quote
Segment Details
Regulated businesses’ revenues in the third quarter of 2022 were $1,003 million compared with $944 million in the year-ago quarter. Net income was $302 million, up 10.6% year over year.
Market-Based businesses’ revenues in the third quarter of 2022 were $79 million compared with $148 million in the year-ago period. A net loss of $5 million was reported in the third quarter of 2022 against net income of $5 million in the year-ago period.
Highlights of the Release
Total operating expenses for the third quarter amounted to $643 million, down 4.7% from the year-ago quarter’s $675 million due to a decrease in operating and maintenance expenses.
The operating income was $439 million, up 5.3% from the year-ago figure of $417 million. The new rates (effective from Jan 1, 2022) should boost annual revenues by $193 million and the pending rate case, if approved without any change, would further increase the top line by $458 million.
American Water Works continues to expand operations through acquisitions and organic means. Through nine closed acquisitions in four states, it added 79,300 customers to its base. AWK’s 29 pending acquisitions (as of Sep 30), when completed, would add another 21,600 customers.
In the first nine months of 2022, American Water Works invested $1.9 billion in infrastructure improvements to provide quality services to its expanding customer base.
Financial Highlights
Cash and cash equivalents amounted to $77 million as of Sep 30, 2022, down 38.8% from $116 million as of Dec 31, 2021.
The total long-term debt was $10,943 million as of Sep 30, 2022, up 6.6% from $10,344 million as of Dec 31, 2021.
Guidance
American Water Works affirmed the 2022 earnings guidance at $4.39-$4.49 per share. The Zacks Consensus Estimate for 2022 earnings of $4.44 per share is on par with the mid-point of the company’s guided range. AWK reiterated long-term earnings growth of 7-9%.
The company plans to invest nearly $2.5 billion across its footprint in 2022 and is on course to meet its expenditure plans. American Water Works has increased its 2023-2027 capital investment plan to $14-$15 billion and $30-$34 billion for the 10-year period of 2023-2032. Earlier, the company expected to invest $13-$14 billion in the 2022-2026 time period and $28-$32 billion during 2022-2031.
Zacks Rank
American Water Works currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Essential Utilities Inc. (WTRG - Free Report) is slated to report third-quarter 2022 earnings on Nov 7, before the market opens. The Zacks Consensus Estimate for Essential Utilities’ third-quarter EPS is pegged at 23 cents.
The Zacks Consensus Estimate for WTRG’s 2022 earnings is pegged at $1.78 per share, implying year-over-year growth of 6.6%.
American States Water Co. (AWR - Free Report) is slated to report third-quarter 2022 earnings on Nov 7, after market close. The Zacks Consensus Estimate for American States Water’s third-quarter EPS is pegged at 70 cents.
The Zacks Consensus Estimate for AWR’s 2022 earnings is pegged at $2.52 per share, implying year-over-year growth of 2%.
Global Water Resources (GWRS - Free Report) is slated to report third-quarter 2022 earnings on Nov 10, before market open. The Zacks Consensus Estimate for Global Water Resources’ third-quarter EPS is pegged at 5 cents.
The Zacks Consensus Estimate for GWRS’ 2022 earnings is pegged at 20 cents per share, implying year-over-year growth of 25%.