American Water Works Reports Q3 2026 Financial Results and Narrows FY2026 Guidance

Executive Summary

On October 28, 2026, American Water Works Company, Inc. (NYSE: AWK) filed a Form 8-K under Item 2.02 disclosing its financial results for the third quarter ended September 30, 2026. The company reported solid quarterly performance, narrowed its full-year 2026 adjusted EPS guidance towards the upper half of its previous range, initiated standalone 2027 EPS guidance representing ~8% growth at the midpoint, affirmed long-term growth targets, and provided updates on regulatory execution and its pending merger with Essential Utilities.

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Key Financial Highlights

Q3 & YTD 2026 Performance

• GAAP Diluted EPS:
  • Q3 2026: $1.94 per share, compared to $1.94 per share in Q3 2025.
  • YTD 2026: $4.56 per share, compared to $4.47 per share in YTD 2025.
• Adjusted Diluted EPS (Non-GAAP):
  • Q3 2026: $2.00 per share, up 5.8% compared to $1.89 per share in Q3 2025.
  • YTD 2026: $4.63 per share, up 5.2% compared to $4.40 per share in YTD 2025.
• Net Adjustments (Q3 2026): Net addition of $0.06 per share, including estimated weather impact ($0.03 net of tax) and merger-related transaction costs ($0.03 net of tax).

Regulated Segment & Operations

• Regulated Net Income: Rose to $407 million for Q3 2026 (vs. $383 million in Q3 2025) and $946 million for YTD 2026 (vs. $872 million in YTD 2025).
• Revenue Drivers: Q3 operating revenues increased by $60 million year-over-year, driven by authorized revenue increases from completed general rate cases and infrastructure surcharges, partially offset by $18 million in unfavorable weather comparisons.
• Capital Deployment: Invested $2.8 billion year-to-date in infrastructure and acquisitions (including $437 million for regulated acquisitions, adding ~81,000 customer connections).

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Guidance and Long-Term Outlook

• 2026 Adjusted EPS Guidance: Narrowed to $6.07 – $6.12 from the prior range of $6.02 – $6.12.
• 2027 Standalone EPS Guidance: Initiated at $6.53 – $6.63, reflecting 8% growth at the midpoint compared to the 2026 adjusted guidance midpoint.
• Long-Term Targets Affirmed:
  • Long-term EPS growth: 7% – 9%
  • Rate base growth: 8% – 9% (including acquisitions)
  • Dividend per share growth: 7% – 9%
  • Capital Investment Plan: $20+ billion (2026–2030) and $48+ billion (2026–2035); 2027 standalone capex budgeted at $4.1 billion.

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Corporate & M&A Updates

• Merger with Essential Utilities: Remains on schedule to close by the end of Q1 2027. Three states have granted approval, with settlements reached in Pennsylvania, North Carolina, and Texas.
• Dividend Declaration: The Board declared a regular quarterly dividend of $0.8950 per share, payable on December 1, 2026, to shareholders of record as of November 12, 2026.