American Water Narrows 2026 EPS Guidance and Sets 2027 Outlook

American Water Works (AWK ) Company reported third-quarter 2026 adjusted earnings of $2.00 per share on October 28, 2026, compared with $1.89 per share in the same quarter of 2025, and narrowed its full-year 2026 adjusted earnings per share guidance to a range of $6.07 to $6.12, according to the company’s third-quarter 2026 earnings release. GAAP earnings for the quarter ended September 30, 2026 were $1.94 per share, compared with $1.94 per share in the third quarter of 2025.

For the nine months ended September 30, 2026, GAAP earnings were $4.56 per share, compared with $4.47 per share in the same period of 2025, and adjusted earnings were $4.63 per share, compared with $4.40 per share. Third-quarter operating revenues were $1,510 million, compared with $1,451 million a year earlier, and net income attributable to common shareholders was $387 million, compared with $379 million. Nine-month operating revenues were $4,072 million, compared with $3,869 million, with net income of $898 million, compared with $873 million.

The adjusted figures are non-GAAP measures that exclude the estimated impact of weather, incremental interest income through February 13, 2026 related to the 2024 amendment of the former Homeowner Services Group secured seller note, and transaction costs associated with the pending merger with Essential Utilities (WTRG ). The release’s reconciliation shows total net adjustments of $0.06 per share in the third quarter of 2026, consisting of a net $0.03 from the estimated impact of weather and a net $0.03 from merger transaction costs.

“The company has delivered solid results to date in 2026, including key regulatory outcomes that provide for a reasonable and timely return on the investments made for the benefit of our customers,” said John Griffith, president and CEO of American Water.

2026 Guidance Narrowed and 2027 Outlook Initiated

The narrowed 2026 adjusted EPS guidance range of $6.07 to $6.12 replaces the previous range of $6.02 to $6.12. The 2026 range excludes transaction costs to be incurred during 2026 related to the proposed Essential Utilities merger, impacts of weather during 2026, and the incremental interest income through February 13, 2026 tied to the amended Homeowner Services Group note.

The company initiated standalone 2027 adjusted EPS guidance of $6.53 to $6.63, which it said represents 8% EPS growth at the midpoint compared with the 2026 adjusted EPS guidance range. It affirmed all standalone long-term targets unchanged: EPS growth of 7% to 9%, rate base growth of 8% to 9% including acquisitions, acquired customer addition growth of 2%, and dividend per share growth of 7% to 9%. The company stated it is unable to reconcile the adjusted EPS guidance ranges to a GAAP guidance range without unreasonable effort because it cannot reliably predict the nature, amount, or probable significance of such adjustments for future periods.

American Water updated its standalone capital investment plan to more than $20 billion for 2026 through 2030 and more than $48 billion for 2026 through 2035, including a 2027 standalone capital investment plan of $4.1 billion. The company said its 2026 plan of approximately $3.7 billion remains on track. During the first nine months of 2026, it invested $2.8 billion in infrastructure improvements and growth, including $437 million for regulated acquisitions, and approximately 81,000 customer connections were added from acquisitions through September 30, which includes the Nexus Water systems.

Regulated Businesses and Rate Activity

In the third quarter of 2026, the Regulated Businesses’ net income was $407 million, compared with $383 million in the same period of 2025. For the first nine months of 2026, the segment’s net income was $946 million, compared with $872 million a year earlier.

Operating revenues increased $60 million in the quarter and $212 million in the nine-month period, primarily from authorized revenue increases in completed general rate cases and infrastructure proceedings for the recovery of incremental capital and acquisition investments, as well as incremental revenue from closed acquisitions. Unfavorable weather reduced operating revenues by $18 million in the quarter and $7 million in the nine months. Since January 1, 2026, the company has been authorized additional annualized revenues of $284 million, with $179 million from general rate cases and $105 million from infrastructure surcharges, and it cited new rates in effect in the third quarter, including in Pennsylvania and New Jersey. General rate cases are in progress in five jurisdictions, and infrastructure surcharge filings have been made in two jurisdictions, reflecting a total annualized incremental revenue request of $360 million.

Operating expenses were higher by $30 million in the quarter and $103 million in the nine months, due in part to increased production costs from higher purchased water cost and usage and increased purchased power and chemicals costs, partially offset by lower technology-related costs and lower maintenance materials and supplies costs. Depreciation expense was higher by $18 million and $60 million in the respective periods due to the increase in capital investment, and interest expense rose $9 million and $32 million as a result of incremental short- and long-term debt primarily to fund capital investments and acquisitions. Total assets were $37,227 million at September 30, 2026, compared with $35,442 million at December 31, 2025, and long-term debt was $13,987 million, compared with $12,777 million.

On October 27, 2026, the company’s board of directors declared a quarterly cash dividend of $0.8950 per share, payable on December 1, 2026 to shareholders of record as of November 12, 2026.

On the proposed merger with Essential Utilities, the company said three states have approved the transaction and settlements have been reached in Pennsylvania, North Carolina and Texas. Griffith said the company continues to work toward closing the merger by the end of the first quarter of 2027 as anticipated.

The conference call to discuss the third-quarter 2026 results, the 2027 standalone adjusted EPS guidance, and the affirmation of long-term targets is scheduled for Thursday, October 29, 2026 at 9 a.m. Eastern Time via audio webcast on the company’s investor relations website, with presentation slides posted in advance and a replay available for one year.