It has been about a month since the last earnings report for American Water Works (AWK Quick QuoteAWK - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is American Water Works due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for American Water Works Company, Inc. before we dive into how investors and analysts have reacted as of late.

American Water Works Q1 Earnings Lag Estimates, Revenues Rise Y/Y

American Water Works Company reported first-quarter 2026 adjusted earnings per share (EPS) of $1.01, which missed the Zacks Consensus Estimate of $1.10 by 8.18%. The bottom line declined 0.98% from the year-ago quarter's level of $1.02 per share.

Total Revenues of AWK

AWK’s total quarterly revenues of $1.21 billion surpassed the Zacks Consensus Estimate of $1.12 billion by 8.25%. The top line also increased 5.69% from the year-ago figure of $1.14 billion.

AWK’s Segmental Details

Regulated businesses’ net revenues in the first quarter of 2026 were $1.11 billion, up 5.91% year over year.

Others’ net revenues in the first quarter of 2026 were $96 million, up 3.23% year over year.

Highlights of AWK’s Q1 Release

Total operating expenses for the first quarter of 2026 were $816 million, up 5.84% from the year-ago quarter’s $771 million, primarily driven by higher operation and maintenance expenses.

The operating income totaled $391 million, up 5.39% from the year-ago figure of $371 million.

AWK continues to expand its business through acquisitions and organic growth. As of March 31, 2026, the company closed one acquisition, adding 4,600 new customers. The completion of another 22 pending acquisitions is expected to add nearly 58,400 new customers.

New rates effective since Jan.1, 2026, will increase 2026 annual revenues by $89 million. As of April 30, 2026, the pending rate cases, if approved without any changes, are projected to increase revenues by another $518 million.

Financial Details of AWK

American Water Works’ cash and cash equivalents amounted to $137 million as of March 31, 2026, compared with $98 million as of Dec. 31, 2025.

Total long-term debt was $12.77 billion as of March 31, 2026, down 0.09% from $12.78 billion as of Dec. 31, 2025.

In first-quarter 2026, cash flow from operating activities was $305 million compared with $331 million in the year-ago period.

Merger Update

On April 21, 2026, American Water Works stated that its merger with Essential Utilities, Inc. had received its first regulatory approval from the Kentucky Public Service Commission.

AWK’s Long-Term Guidance

American Water Works affirmed its 2026 EPS guidance in the range of $6.02-$6.12. The Zacks Consensus Estimate of $6.09 lies near the high end of the company’s guided range.

AWK plans to invest $3.7 billion in 2026. The company still expects its long-term EPS and dividend growth to be 7-9% and rate-based growth to be 8-9%.

 

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months.

VGM Scores

At this time, American Water Works has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

American Water Works has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.