American Water Q3 results miss on higher costs
Overview
US water utility's Q3 revenue, adjusted EPS and operating income missed analyst expectations
Adjusted EPS for Q3 rose yr/yr, but higher costs and interest expenses offset revenue gains
Company narrowed 2026 adjusted EPS guidance to upper half of prior range, initiated 2027 EPS outlook
Outlook
American Water narrows 2026 adjusted EPS guidance to $6.07-$6.12 from $6.02-$6.12
Company initiates 2027 standalone adjusted EPS guidance of $6.53-$6.63, reflecting 8% growth at midpoint
American Water affirms long-term EPS growth target of 7-9% and rate base growth of 8-9%
Result Drivers
RATE INCREASES - Co said revenue growth was driven by new rates and infrastructure surcharges in regulated businesses
ACQUISITIONS - Co said acquisitions, including Nexus Water systems, added about 81,000 customer connections and contributed to revenue growth
HIGHER COSTS - Co said increased operating, depreciation and financing costs partially offset revenue gains
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $1.51 bln | $1.56 bln (5 Analysts) |
Q3 Adjusted EPS | Miss | $2 | $2.05 (7 Analysts) |
Q3 Net Income | $387 mln | ||
Q3 Operating Income | Miss | $641 mln | $674.50 mln (4 Analysts) |
Q3 Operating Expenses | $869 mln | ||
Q3 Pretax Profit | $499 mln |
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 10 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the water & related utilities peer group is "buy."
Wall Street's median 12-month price target for American Water Works Company, Inc. is $142.00, about 0.6% above its October 27 closing price of $141.10
The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 21 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)