American Water Q3 results miss on higher costs

American Water Works

28/10/2026 20:39

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: ID:nPn5qKHFca

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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Oct 28 - American Electric Power Q3 revenue rises 13.7%, beats estimates

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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.)