American Water (AWK) Q3 Earnings & Revenues Surpass Estimates
American Water Works Company AWK posted third-quarter 2023 operating earnings per share (“EPS”) of $1.66, which surpassed the Zacks Consensus Estimate of $1.55 by 7.1%.
The bottom line improved 1.8% from the year-ago quarter's earnings of $1.63 per share. The year-over-year improvement in earnings was due to the favorable impacts of warm and dry weather, which created demand for water.
Total Revenues
Total revenues of $1,167 million surpassed the Zacks Consensus Estimate of $1,097 million by 6.4%. The top line increased 7.8% from the year-ago figure of $1,082 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
Segmental Details
Regulated businesses’ revenues in third-quarter 2023 were $1,095 million, up 9.2% from the year-ago quarter’s level. The year-over-year improvement was due to completed general rate cases and infrastructure proceedings for the recovery of incremental capital and acquisition investments.
Other revenues in third-quarter 2023 were $72 million compared with $79 million in the year-ago period.
Highlights of the Release
Total operating expenses for the third quarter were $689 million, up 7.2% from the year-ago quarter’s $643 million due to an increase in operating and maintenance expenses.
The operating income was $478 million, up 8.9% from the year-ago figure of $439 million. The actual operating income was better than our model’s projected operating income of $446.7 million.
American Water Works continues to expand operations through acquisitions and organic means. Through 14 closed acquisitions in six states, it added 7,900 customers to its base as of Sep 30, 2023. AWK’s 32 pending acquisitions (as of Sep 30), when completed, will add another 88,100 customers.
To date, the company has been authorized additional annualized revenues of $273 million from general rate cases in 2023. Further, $86 million of additional annualized revenues from infrastructure surcharges have been authorized and are effective in 2023. Currently, the rate request pending amounts to $194 million, which includes an infrastructure surcharge request of $23 million.
Financial Highlights
Cash and cash equivalents amounted to $628 million as of Sep 30, 2023 compared with $85 million as of Dec 31, 2022.
The total long-term debt was $11,698 million as of Sep 30, 2023, up 6.23% from $10,926 million as of Dec 31, 2022.
During the first nine months of 2023, cash flow from operating activities was $1,347 million compared with $764 million in the year-ago period.
Guidance
American Water Works reiterated 2023 earnings guidance at $4.72-$4.82 per share. The Zacks Consensus Estimate for 2023 earnings of $4.8 per share, a tad higher than $4.77, the midpoint of the company’s guided range.
American Water Works expects its 2024 earnings guidance in the range of $5.10-$5.20 per share. The Zacks Consensus Estimate for 2024 earnings of $5.12 per share, a tad lower than $5.15, the midpoint of the company’s guided range. AWK reiterated long-term earnings and dividend growth in the range of 7-9%.
The company plans to invest nearly $2.9 billion across its footprint in 2023 and expects to invest $3.1 billion in 2024. AWK intends to invest in the range of $16-$17 billion in the 2024-2028 period and $34-$38 billion in the 2024-2033 period.
Zacks Rank
American Water Works currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Essential Utilities Inc. WTRG is set to report third-quarter 2023 earnings on Nov 6. The Zacks Consensus Estimate for Essential Utilities’ third-quarter EPS is pegged at 29 cents, implying year-over-year growth of 11.5%.
The Zacks Consensus Estimate for WTRG’s 2023 earnings is pinned at $1.86 per share, implying year-over-year growth of 5.1%. WTRG’s long-term (three- to five-year) earnings growth is pegged at 5.6%.
American States Water Co. AWR is set to report third-quarter 2023 earnings on Nov 6, after market close. The Zacks Consensus Estimate for American States Water’s third-quarter EPS is pinned at 82 cents, suggesting year-over-year growth of 18.8%.
The Zacks Consensus Estimate for AWR’s 2023 earnings is pegged at $2.96 per share, implying year-over-year growth of 29.8%. AWR’s long-term earnings growth is pinned at 6.3%.
Consolidated Water Co. Ltd CWCO is scheduled to report third-quarter 2023 earnings on Nov 10. The Zacks Consensus Estimate for Consolidated Water’s third-quarter EPS is pegged at 39 cents, suggesting year-over-year growth of 680%.
The Zacks Consensus Estimate for CWCO’s 2023 earnings is pinned at $1.48 per share, implying year-over-year growth of 174.1%. CWCO’s long-term earnings growth is pegged at 8%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
Consolidated Water Co. Ltd. (CWCO) : Free Stock Analysis Report
Essential Utilities Inc. (WTRG) : Free Stock Analysis Report
