American Water Works (AWK) Q4 Earnings & Sales Beat Estimates
American Water Works Company AWK posted fourth-quarter 2022 operating earnings per share (EPS) of 81 cents, which surpassed the Zacks Consensus Estimate of 76 cents by 6.6%. The bottom line declined 4.7% from the year-ago earnings of 85 cents per share.
Full-year earnings per share were $4.51 compared with $6.95 in 2021. Full-year 2022 earnings exceeded the guidance range of $4.39-$4.49 per share.
Total Revenues
Total revenues of $931 million surpassed the Zacks Consensus Estimate of $884 million by 5.3%. The top line declined 2.1% from the year-ago figure of $951 million.
2022 revenues were $3,792 million compared with $3,930 million in the year-ago period.
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
Segment Details
Regulated businesses’ revenues in 2022 were $3,505 million, up 3.6% from the year-ago quarter level. The year-over-year surge in revenues was primarily due to authorized revenue increases resulting from completed general rate cases and infrastructure proceedings to recover incremental capital and acquisition investments.
Other revenues in 2022 were $287 million compared with $546 million in the year-ago period. As a result of the sale of the Company’s Homeowner Services Group (“HOS”), the categories which were previously shown as “Market-Based Businesses” and “Other” have been combined and are now shown as Other.
Highlights of the Release
Total operating expenses for the fourth quarter were $670 million, down 8.3% from the year-ago quarter’s $731 million due to a decrease in operating and maintenance expenses.
The operating income was $261 million, up 18.6% from the year-ago figure of $220 million. The new rates (effective from Jan 1, 2022) should boost annual revenues by $416 million and the pending rate case, if approved without any change, would further increase the top line by $181 million.
American Water Works continues to expand operations through acquisitions and organic means. Through 26 closed acquisitions in seven states, it added 70,000 customers to its base. AWK’s 21 pending acquisitions (as of Dec 31), when completed, would add another 32,400 customers.
In 2022, American Water Works invested $2.6 billion in infrastructure improvements to provide quality services to its expanding customer base.
Financial Highlights
Cash and cash equivalents amounted to $85 million as of Dec 31, 2022, compared with $116 million as of Dec 31, 2021.
The total long-term debt was $10,926 million as of Dec 31, 2022, up 5.6% from $10,344 million as of Dec 31, 2021.
Guidance
American Water Works provided 2023 earnings guidance at $4.72-$4.82 per share. The Zacks Consensus Estimate for 2023 earnings of $4.78 per share is a tad higher than $4.77, the mid-point of the company’s guided range. AWK reiterated long-term earnings growth of 7-9%.
The company plans to invest nearly $2.9 billion across its footprint in 2023.
American Water Works has reiterated its target to invest in the range of $14-$15 billion in the 2023-2027 time period and $30-$34 billion for the 10-year period of 2023-2032.
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 fourth-quarter 2022 earnings on Feb 27, before market open. The Zacks Consensus Estimate for Essential Utilities’ fourth-quarter EPS is pegged at 45 cents, implying year-over-year growth of 2.3%.
The Zacks Consensus Estimate for WTRG’s 2023 earnings is pegged at $1.89 per share, implying year-over-year growth of 6.5%. WTRG’s long-term (three to five years) earnings growth is pegged at 6%.
American States Water Co. AWR is set to report fourth-quarter 2022 earnings on Mar 1, after market close. The Zacks Consensus Estimate for American States Water’s fourth-quarter EPS is pegged at 84 cents, suggesting year-over-year growth of 52.7%.
The Zacks Consensus Estimate for AWR’s 2023 earnings is pegged at $2.71 per share, implying year-over-year growth of 8.4%.
Consolidated Water Co. Ltd. CWCO is likely to report fourth-quarter 2022 earnings soon. The Zacks Consensus Estimate for Consolidated Water’s fourth-quarter EPS is pegged at 18 cents.
The Zacks Consensus Estimate for CWCO 2023 earnings is pegged at 91 cents per share, implying year-over-year growth of 62.5%. CWCO’s long-term earnings growth is pegged at 8%.
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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
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