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American Water Works Q3 Earnings Miss Estimates, Revenues Beat

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American Water Works Company (AWK - Free Report) posted third-quarter 2024 operating earnings per share (EPS) of $1.80, which lagged the Zacks Consensus Estimate of $1.84 by 2.2%. The bottom line improved 8.4% from the year-ago quarter's $1.66.

The year-over-year improvement in earnings was due to increased revenues from the implementation of new rates in the Regulated Businesses from capital and acquisition investments.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Total Revenues of AWK

Total quarterly revenues of $1.32 billion surpassed the Zacks Consensus Estimate of $1.2 billion by 9.8%. The top line also increased 13.4% from the year-ago figure of $1.16 billion.

 

Highlights of AWK’s Q3 Release

Total operating expenses for the third quarter were $780 million, up 13.2% from the year-ago quarter’s $689 million, due to an increase in operating and maintenance expenses.
The operating income was $543 million, up 13.6% from the year-ago figure of $478 million. The metric was a tad higher than our model’s projection of $520 million.
AWK continues to expand operations through acquisitions and organic means. As of Sept.30, the company completed five acquisitions, which added 33,400 new customers to its existing customer base.

AWK’s 22 pending acquisitions (as of Oct. 30), when completed, will add another 43,400 customers.

Since Jan. 1, 2024, the company has been authorized annualized revenues of $256 million from rate increases. Further, a total of $90 million of additional annualized revenues from infrastructure charges have been authorized and are effective. Currently, the rate request pending amounts to $375 million.

Net income in third-quarter was $350 million compared with $323 million in the year-ago quarter.

AWK’s Segmental Details

Regulated businesses’ net incomes in third-quarter 2024 were $356 million, up 7.6% year over year.

Other net loss in third-quarter 2024 was $6 million, narrower than the previous-year quarter’s loss of $8 million.

Financial Highlights of AWK

Cash and cash equivalents amounted to $127 million as of Sept. 30, 2024, compared with $330 million as of Dec. 31, 2023. Total liquidity (including cash and credit) was $2.58 billion as of Sept. 30, which is enough to meet near-term obligations.

The total long-term debt was $12.55 billion as of Sept. 30, 2024, up 7.7% from $11.7 billion as of Dec. 31, 2023.

In the first nine months of 2024, cash flow from operating activities was $1.4 billion compared with $1.34 billion in the year-ago period.

AWK Stock’s Long-term Guidance

American Water reiterated its 2024 EPS guidance of $5.25-$5.30. The Zacks Consensus Estimate of $5.24 per share is a tad below of $5.27, the midpoint of the company’s guided range. AWK reiterated long-term earnings and dividend growth in the range of 7-9%. The company issued 2025 earnings per share guidance of $5.65 to $5.75.

The company plans to invest nearly $3.3 billion in 2025.

AWK announced its long-term capital expenditure plan to strengthen and expand its existing infrastructure. For 2025-2029 capital expenditure is expected in the range of $17-$18 billion and for 2025-3034 in the band of $40-$42 billion.

Zacks Rank of AWK

American Water currently carries a Zacks Rank #2 (Buy). 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 set to report third-quarter 2024 earnings on Nov. 4. The Zacks Consensus Estimate for Essential Utilities’ third-quarter EPS is pegged at 23 cents, implying a decline of 23.3% from the prior-year figure.

American States Water Co. (AWR - Free Report) is set to report third-quarter 2024 earnings on Nov. 6. The Zacks Consensus Estimate for American States Water’s EPS is pinned at 99 cents, indicating growth of 16.5% from the year-ago quarter.

Global Water Resources Inc. (GWRS - Free Report) is scheduled to report third-quarter 2024 earnings on Nov. 7. The Zacks Consensus Estimate for Global Water Resources’ EPS is pegged at 11 cents, on par with the prior-year quarter.

 

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