American Water Works Company (AWK) Q3 2024 earnings summary

Executive summary

• Q3 2024 EPS was $1.80, up from $1.66 in Q3 2023; YTD EPS reached $4.17, up from $4.03, driven by new rates, capital investments, and acquisitions.

• 2024 EPS guidance affirmed at $5.25–$5.30, with 2025 guidance initiated at $5.65–$5.75, representing 8% growth over weather-normalized 2024.

• Closed $230 million Butler Area Sewer Authority acquisition, adding 15,000 customer connections.

• Over $2.0 billion invested in infrastructure and acquisitions through September 30, 2024, with a full-year target of $3.3 billion.

• Announced a cybersecurity incident in October 2024 with no operational or financial impact; ongoing investigation and related litigation noted.

Financial highlights

• Q3 2024 operating revenues were $1,323 million, up from $1,167 million in Q3 2023; net income for Q3 was $350 million, up from $323 million.

• Operating expenses increased due to higher employee, production, and depreciation costs; interest expense rose to support capital investments.

• Dividend per share projected at $3.00 for 2024, with a payout ratio of 58%, in line with the 55–60% target.

• Debt-to-capital ratio at 56% as of September 30, 2024, within target of <60%.

• $1.4 billion in senior notes issued in 2024 at 5.15% and 5.45% rates, completing the year’s financing plan.

Outlook and guidance

• 2024 EPS guidance affirmed at $5.25–$5.30, including $0.10/share incremental interest income from the amended HOS seller note.

• 2025 EPS guidance initiated at $5.65–$5.75, reflecting 8% growth over weather-normalized 2024.

• Long-term EPS and dividend CAGR targets of 7–9%; rate base growth of 8–9% expected, with capital plan of $17–$18 billion for 2025–2029.

• Capital investment plan for 2024 is $3.3 billion, with $40–$42 billion planned for 2025–2034.

• Pending rate cases and infrastructure surcharge filings across multiple states could further increase revenues in 2025.