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.

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

• 2024 EPS guidance affirmed at $5.25–$5.30; 2025 guidance set at $5.65–$5.75, reflecting 8% growth over weather-normalized 2024.

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

• No material impact expected from the October 2024 cybersecurity incident; investigation ongoing.

Financial highlights

• Q3 2024 operating revenues were $1,323M, up from $1,167M in Q3 2023; YTD revenues were $3,483M, up from $3,202M.

• Revenue growth driven by new rates, capital investments, and acquisitions, with $0.84 per share from rate case outcomes.

• Operating expenses rose due to higher employee, production, and depreciation costs; Q3 operating expenses were $780M.

• Interest expense increased, with $132M in Q3 2024 and $387M YTD; incremental $0.10/share interest income from amended HOS note.

• Board declared a quarterly dividend of $0.7650 per share, payable December 2024.

Outlook and guidance

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

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

• Long-term EPS and dividend CAGR targets of 7–9% and rate base growth of 8–9% reaffirmed.

• Capital investment plan of $17–$18B for 2025–2029 and $40–$42B for 2025–2034.

• $1B to be spent over five years for EPA Lead and Copper Rule compliance; $1B for PFAS rule compliance.