Category: AWK

AWK – American Water’s Earnings and Revenue Beat Wall Street’s Expectations

American Water Works (AWK 1.46%), the leading U.S. water and wastewater utility, reported better-than-expected fourth-quarter 2022 results Wednesday after the closing bell.

Utility stocks rarely make big moves either way following their earnings releases because their results are usually highly predictable. Indeed, that proved true in this case. In the two-day period following American Water’s release, shares edged up 0.2%, while the S&P 500 Index declined 1.7%. Shares have returned 2.8% over the one-year period through Feb. 17, while the S&P 500’s return is underwater by 5.3% over this period.

American Water’s key quarterly numbers 

Metric Q4 2021 Q4 2022 Change YOY
Revenue $951 million $931 million (2%)
GAAP operating income $220 million $261 million 19%
GAAP net income $645 million  $147 million (77%)
GAAP earnings per share (EPS) $3.55 $0.81 (77%)
Adjusted EPS $0.85 $0.81 (5%)

Data source: American Water Works. GAAP = generally accepted accounting principles. YOY = year over year.

The year-ago period’s adjusted EPS excludes $2.70 from the company’s sale of its homeowner services (HOS) business in December 2021.

The revenue decline was driven by the company’s divestitures of its New York state regulated business, in January 2022, and its HOS business. The former generated revenue of $30 million in the fourth quarter of 2021.

The bottom line was also hurt by the sale of the New York business, which generated net income of $4 million, or $0.02 per share, in the year-ago period. That said, the sale of this business seems like a smart move since it generated funds the company can use to make acquisitions in states where it already has operations.

The sale of the HOS business had no net effect on earnings in Q4 2022. The EPS of $0.06 that this business generated in the year-ago period was fully replaced by EPS of $0.06 in Q4 2022 from interest income earned on the seller note and revenue share agreements from this sale.

Wall Street was looking for fourth-quarter adjusted EPS of $0.78 on revenue of $924 million. So the company beat both expectations.

Acquisition activity during 2022

American Water continued its robust pace of acquiring regulated water and wastewater utilities. In 2022, the company added about 70,000 customer connections through 26 closed acquisitions across 7 states. The total price of these acquisitions was $335 million.

In addition, at the end of the year, it had 21 acquisitions across nine states under agreement. These acquisitions — which have a total price of $326 million — will add about 32,400 customer connections. The company has roughly 1.3 million total connections, including those in the pipeline.

For context, in 2021, American Water completed 23 regulated acquisitions.

What the CEO had to say 

Here’s most of what CEO Susan Hardwick had to say in the earnings release: 

American Water successfully executed on our strategies in 2022, achieved on-plan earnings growth, and again delivered strong dividend growth to investors. Importantly, we achieved constructive outcomes [rate increases] in general rate cases in three of our largest jurisdictions — New Jersey, Pennsylvania, and Illinois.

We invested a record $2.6 billion across our business, led by infrastructure renewal, and completed 26 regulated acquisitions during the year. We are also proud that 2022 marked our best year of safety performance on record, and that we established additional GHG [greenhouse gas] emissions reduction goals, including a net zero target by 2050.


For 2023, American Water affirmed its EPS guidance of $4.72 to $4.82 on a weather-normalized basis. In 2022, its weather-normalized EPS was $4.45, so its outlook represents annual growth of 6.1% to 8.3%.

It also affirmed its long-term annual weather-normalized EPS and dividend growth targets of 7% to 9%.

As for the dividend, the company raised it by 8.7% in 2022. Shares were yielding 1.75% as of the market close on Feb. 17.

Investors looking for a low-risk, dividend-paying utility stock that has solid total capital appreciation potential will be hard-pressed to find better options than American Water Works. While the stock wasn’t one of the best-performing water utility stocks in 2022, it remains the best performer in its industry over the long term. 

Beth McKenna has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

AWK – American Water Works Company, Inc. (AWK) Q4 2022 Earnings Call Transcript

American Water Works Company, Inc. (NYSE:AWK) Q4 2022 Results Conference Call February 16, 2023 9:00 AM ET

Company Participants

Maureen Duffy – Senior Vice President of Communications

Susan Hardwick – President and Chief Executive Officer

John Griffith – Chief Financial Officer

Cheryl Norton – Executive Vice President and Chief Operating Officer

Conference Call Participants

Richard Sunderland – JPMorgan

Gregg Orrill – UBS


Good morning, and welcome to American Water’s Fourth Quarter and Year-End 2022 Earnings Conference Call. As a reminder, this call is being recorded and is also being webcast with an accompanying slide presentation through the Company’s Investor Relations website. The audio webcast archive will be available for one year on American Water’s Investor Relations website.

I would now like to introduce your host for today’s call, Maureen Duffy, Senior Vice President of Communications. Ms. Duffy, you may begin.

Maureen Duffy

Thank you. Good morning, everyone, and thank you for joining us for today’s call. I’m filling in today for Aaron, who is a bit under the weather. At the end of our prepared remarks, we will open the call for your questions.

Let me first go over some safe harbor language. Today, we will be making forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based on our current expectations, estimates and assumptions.

However, since these statements deal with future events, they are subject to numerous known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results indicated or implied by such statements.

Additional information regarding these risks, uncertainties and factors as well as a more detailed analysis of our financials and other important information is provided in the fourth quarter earnings release and in our 2022 Form 10-K, each filed

AWK – California American Water Applies for Water Resources Sustainability Plan

SAN DIEGO–()–California American Water has supplemented its application to set new rates in each of its service areas for 2024 through 2026, which was originally filed in July 2022 with the California Public Utilities Commission (CPUC). The amended filing includes a proposal to strengthen customer protections through the use of a regulatory tool known as decoupling. Recent legislation passed by the Legislature and signed by Governor Newsom last year supports the use of ratemaking strategies like the Water Resources Sustainability Plan to promote conservation and infrastructure renewal while protecting ratepayers.

“Our request is good for customers and the environment,” said California American Water President Kevin Tilden. “It supports rewarding customers for conserving water while making investments to renew and improve our drinking water infrastructure. We will continue to provide customers with excellent value for their service and maintain our systems to supply high-quality water service.”

The filing has also been updated with more timely customer demand estimates and to reflect present rates approved by the CPUC effective January 1st, 2023. Under the amended filing, new rates would be effective January 1, 2024, pending approval by the CPUC. This spring, the CPUC is expected to hold public hearings virtually and in-person for customers around the state. Updated information about the Water Resources Sustainability Plan will be included in the notices customers receive prior to the hearings.

The application itself includes infrastructure renewals, wildfire mitigation, climate resiliency efforts and strengthening affordability programs in addition to the new Water Resources Sustainability Plan. One particular focus of the request is to improve the climate change resiliency of our systems. These measures include fire assessment analysis at company facilities around the state as well as active mitigation measures undertaken in some high-risk zones. The activities also include the bolstering of back-up generator power for use during emergencies like wildfires or Public Safety Power Shutoffs.

About California American Water: California American Water, a subsidiary of American Water (NYSE: AWK), provides high-quality and reliable water and wastewater services to more than 725,000 people. Information regarding California American Water’s service areas can be found on the company’s website

About American Water: With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states. American Water provides safe, clean, affordable and reliable water services to our customers to help keep their lives flowing. For more information, visit and Follow American Water on Twitter, Facebook and LinkedIn.

AWK – American Water’s Unmanned Aerial System Program Enters into Partnership with The New Jersey Innovation Institute

CAMDEN, N.J.–()–American Water (NYSE: AWK), the largest publicly traded U.S. water and wastewater utility company, announced today its Unmanned Aerial System (UAS) Program has entered into an agreement with The New Jersey Innovation Institute (NJII), an New Jersey Institute of Technology (NJIT) corporation, to perform research under a NJIT Federal Aviation Administration (FAA) Part 91 Certificate of Authorization (COA). The COA enables research activities to take place both beyond visual line of sight (BVLOS) and up to an altitude of 1,500 feet above ground level.

“American Water is proud to partner with NJII/NJIT, enabling us to jointly perform unmanned aerial systems and payload research flying up to three miles from a UAS pilot at an altitude of 1,500 feet to capture wide area mapping at high resolutions,” said Christopher Kahn, Director of UAS, American Water. “This significant research will enhance monitoring of source water and potential environmental threats to our critical infrastructure water supply.”

Additionally, American Water’s long-range mapping and inspection airframe, the Censys Technologies Sentaero, provides the ability to safely inspect facilities from miles away through high-resolution cameras, while staying in the air for over an hour.

“American Waters partnerships with NJII/NJIT & Censys Technologies is important for advancing the integration of UAS into the national airspace because it is an example of enterprise operation standardization across multiple applications,” said Trevor Perrott, CEO & Co-Founder, Censys Technologies. “Through American Water’s leadership, our country is another step closer to making safe BVLOS drone missions commonplace. The exciting part is the story doesn’t end here.”

American Water is also working closely with several government agencies and partner organizations to enable BVLOS UAS missions during temporary flight restrictions, which are commonly in place after natural disasters.

This press release is an update to an announcement previously distributed by American Water on January 24, 2023.

About American Water

With a history dating back to 1886, American Water (NYSE: AWK) is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states. American Water provides safe, clean, affordable and reliable water services to our customers to help keep their lives flowing. For more information, visit and Follow American Water on Twitter, Facebook and LinkedIn.


The New Jersey Innovation Institute (NJII), an NJIT corporation, was founded in 2014 and helps turn ideas into workable solutions across four divisions: healthcare, entrepreneurship, defense and homeland security, and professional and corporate education. NJII combines the vast resources of NJIT, strong and far-reaching industry and government relationships, and proven methods for building industry centric ecosystems to help drive innovation and deliver solutions that make a direct impact on the economy and the health and welfare of its participants.

One of the nation’s leading public polytechnic universities, New Jersey Institute of Technology (NJIT) prepares students to be leaders in the technology-dependent economy of the 21st century.

About Censys Technologies

Censys Technologies Corporation builds remote sensing hardware and software solutions for UAS service providers, enterprise organizations and government entities. This includes the Sentaero family of products – which is the UAV performance and value leader in the fields of agriculture, infrastructure monitoring, disaster relief and public safety. Created by three Embry-Riddle Aeronautical University alumni in 2017, Censys Technologies’ priorities are centered on understanding customer needs and delivering technology and products that will perform and grow their business – bringing intelligence to business from beyond the horizon.

AWK – American Water (AWK) Missouri Arm to Spend $2.4M on Upgrades

American Water Works (AWK Free Report) recently announced that its unit, Missouri American Water, is going to invest $2.4 million to upgrade 10,500 feet of water main in Jefferson City. The company will invest the funds in four projects in the region, and replace as well as upsize the water mains. These necessary upgrades will increase water flow for customers and ensure adequate supply of water for fire fighters.

Missouri American Water provides water and wastewater services to nearly 1.5 million people in Missouri, and has been investing steadily for upgrading and maintaining its infrastructure. Since 2017, the company has invested more than $620 million in water and wastewater system improvements, and filed a rate hike appeal on Jun 30, 2020 to recoup the investment. The Missouri Public Service Commission approved a water and wastewater rate revision, which took effect from May 2021, and allowed the company to get the necessary funds to continue with these upgrade projects.

Investment in Aging Infrastructure

The U.S. water infrastructure, which includes more than 2.2 million miles of pipelines, is aging and needs major repair and maintenance to provide proper services to millions of Americans. Per the Water and Wastewater Equipment Manufacturers Association, an estimated $750 billion investment is necessary to maintain and expand drinking water as well as wastewater services to meet demand over the next 20 years.

It is evident that massive investment is essential to improve the quality of water and wastewater services in the United States. The U.S. government, through the “American Jobs Plan”, unveiled that it will invest $111 billion for the aging water and wastewater infrastructure over the next 10-year period. Definitely, these investments will be helpful for upgrading the aging infrastructure but the requirement is larger.

Per the findings of the American Society of Civil Engineers, water main breaks occur every two minutes in the United States due to aging of the existing water infrastructure. Pipeline breaks result in the wastage of 6 billion gallons of potable water each day and add to the loss of water utility operators. The pipeline breaks not only increase the cost of water services but also expose it to the possibility of contamination.

Utilities are Investing in Upgrades

Large water utilities of the United States are making regular investments to upgrade and maintain the aging infrastructure to avoid and reduce the occurrence of water main breaks. American Water Works makes regular investments in its infrastructure to upgrade, enhance and maintain the same. The company has plans to invest $10.4 billion between 2021 and 2025, and $22-$25 billion in the next decade.

Essential Utilities (WTRG Free Report) is also making regular investments to upgrade the existing water and wastewater systems. Its long-term plan is to invest nearly $3 billion through 2023 to rehabilitate and strengthen water as well as natural gas pipeline systems. California Water Service (CWT Free Report) plans to invest in the range of $270-$300 million in 2021 to strengthen its water and wastewater infrastructure. Middlesex Water (MSEX Free Report) — under the Water for Tomorrow program — is making regular capital investments to enhance system reliability, resiliency and overall service quality.

Zacks Rank and Price Performance

American Water currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of American Water have outperformed the industry in the past year.

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AWK – American Water Charitable Foundation Announces 2021 Keep Communities Flowing Grant Award Recipients

CAMDEN N.J.–()–The American Water Charitable Foundation, a 501(c)(3) nonprofit organization created by American Water, the nation’s largest publicly traded water and wastewater utility company, today announced the recipients of the 2021 Keep Communities Flowing grant program awards. Nine projects in seven states will be supported by grants totaling $153,400.

“The American Water Charitable Foundation is proud to support communities served by American Water through the Keep Communities Flowing grant program,” said Carrie Williams, president of the American Water Charitable Foundation. “Through this competitive grant program, we focus on high-impact projects and initiatives that engage the community in water-based education, the environment, and community sustainability to empower communities to be strong, vibrant, healthy and environmentally friendly.”

Celebrating its third year, the Keep Communities Flowing grant program provides grants up to $20,000 to support 501(c)(3) public charities whose program or project connects to one or more of American Water’s core focus areas of Water and the Environment, Water and Healthy Living, Environmental Education, and Community Sustainability. During the last three years, the Keep Communities Flowing grant program has funded 32 projects totaling $456,000 in communities served by American Water.

The 2021 grant recipients include the following:

  • Belleville Township High School – District 201, Belleville, IL received $20,000 to develop a network of community-focused plastic recycling centers to collect, recycle and produce useful tools.
  • Sun Foundation, Peoria, IL received $10,000 for software that will help improve content and virtual experience for students attending 28th Clean Water Celebration.
  • Friends of the Parks Fayette County, Lexington, KY received $20,000 to install signage related to water quality and green infrastructure along new Town Branch Commons Trail Walking Tour.
  • Cooper’s Ferry Partnership, Camden, NJ received $18,000 to improve water quality and mitigate local flooding through a community-wide Adopt-A-Drain Program.
  • Up With Trees, Tulsa, OK received $20,000 to plant fruit and nut bearing trees along watershed in community lacking access to fresh food, decreasing debris draining into creek and improving water quality.
  • Stroud Water Research Center, Norristown, PA received $16,000 to upgrade software for their citizen science network to learn, measure, and monitor water quality in the Delaware River Basin.
  • Warren County Development Association, Warren County, PA received $15,000 to enhance a 30-mile bike trail system, encouraging outdoor recreation while boosting tourism in an economically distressed community.
  • James River Association, Richmond, VA received $14,400 to help fund an interactive field-based environmental watershed education program for several hundred high school students.
  • Greater Kanawha Valley Foundation, Charleston, WV received $20,000 to update a community playground, providing a safe outdoor play space for children and families in an underserved community.

Grantees for this program required a local American Water sponsor and were selected based on criteria including clarity of project goals and projected impact, innovation and strength of project, and evidence of community and volunteer engagement. For more information about the Keep Communities Flowing grant program, contact the American Water Charitable Foundation at The application process for the next round of grant funding will be announced in 2022.

About American Water

With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 7,000 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to 15 million people in 46 states. American Water provides safe, clean, affordable and reliable water services to our customers to help make sure we keep their lives flowing. For more information, visit and follow American Water on Twitter, Facebook and LinkedIn.

About the American Water Charitable Foundation

The American Water Charitable Foundation is a 501(c)(3) nonprofit organization that provides a formal way to demonstrate the company’s ongoing commitment to being a good neighbor, citizen, and contributor to the communities where American Water and its employees live, work and operate. The Foundation helps support American Water employee-identified nonprofit endeavors.

AWK – Pennsylvania American Water Signs Agreement to Purchase City of York Wastewater System

MECHANICSBURG, Pa.–()–Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it has signed an agreement with the York City Sewer Authority to purchase the wastewater system assets of the City of York in York County for $235 million. The City’s wastewater system directly and indirectly serves more than 45,000 connections.

“Pennsylvania American Water looks forward to becoming the wastewater provider for the City of York and surrounding communities and delivering safe, reliable service that meets or surpasses all regulations and protects the environment,” said Pennsylvania American Water President Mike Doran. “We are committed to being an excellent community partner and delivering on our infrastructure investment, technical expertise and decades of wastewater experience while providing the city with vital funding for this community for years to come.”

The agreement was approved by the York City Council on March 2 and by the York City Sewer Authority on March 24.

“With this agreement, York’s future is bright – free from the debt and financial pain that have held us back for so long,” said York Mayor Michael Helfrich, noting that the sale will provide much-needed revenues to the city, averting devastating tax increases and cuts to essential services while also retiring long-term debts. “This is a new day for York, one filled with an unwavering optimism as our residents and businesses can finally breathe a sigh of relief for the first time in decades.”

As part of the agreement, Pennsylvania American Water will request approval to preserve York City’s current wastewater rates for a minimum of three years, offer employment to all of the city’s wastewater system employees, establish an in-person customer service center in York, provide an up-front deposit of $20 million, and contribute at least $50,000 in donations to nonprofit organizations serving the city and its residents. The company will also continue to provide contracted wholesale wastewater treatment and disposal for the municipalities of Manchester Township, West Manchester Township, York Township, North York Borough, West York Borough, Spring Garden Township and Springettsbury Township and looks forward to developing strong partnerships that meet the needs of all customers, including those outside the city.

Upon ownership, Pennsylvania American Water will make necessary treatment and collection system upgrades to improve the system. Specifically, the company plans to make significant investments toward reducing inflow and infiltration and removing phosphorus, which will improve the overall water quality in Codorus Creek and, ultimately, the Chesapeake Bay Watershed.

Pennsylvania American Water will seek all necessary approvals from its regulators and expects to close the transaction by the end of 2021 or the beginning of 2022. The company’s rates are set by the Pennsylvania Public Utility Commission (PUC), and any future rate changes would have to be reviewed and approved by the PUC.

The purchase agreement between Pennsylvania American and the City was executed under Act 12, which allows municipalities to sell their water and wastewater systems for a price based on the fair market value of the facilities. Enacted in 2016, this statute gives municipalities the opportunity to receive a purchase price that is more reflective of the current value of their system assets.

In 2020, Pennsylvania American Water acquired the wastewater assets of Borough of Kane Authority in McKean County and the water assets of Winola Water Company in Wyoming County, adding approximately 2,100 new customers. The company also signed purchase agreements with Brentwood Borough in Allegheny County, Valley Township in Chester County, and Royersford Borough and Upper Pottsgrove Township in Montgomery County, which will add another 10,300 wastewater customers and 1,700 water customers to the company’s customer base upon closing. Pennsylvania American Water also has a proven track record of successfully acquiring and managing large municipal wastewater systems like York City Sewer Authority, including the Municipal Authority of the City of McKeesport in 2017 and the Scranton Sewer Authority in 2016.

About Pennsylvania American Water

Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.4 million people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 7,000 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to 15 million people in 46 states. American Water provides safe, clean, affordable and reliable water services to our customers to help make sure we keep their lives flowing. For more information, visit and follow American Water on Twitter, Facebook and LinkedIn.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, the completion of the proposed acquisition; the ability to satisfy closing and other conditions related to the proposed transaction, including obtaining regulatory approvals; anticipated capital investments; and the ability to achieve certain benefits, synergies and goals relating to the transaction and the operations to be acquired. These statements are based on the current expectations of management of Pennsylvania American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including with respect to (1) obtaining the regulatory and other approvals required for the acquisition; (2) the result of the fair market value appraisal required by Act 12; (3) satisfying other conditions to the closing of the acquisition; (4) the occurrence of the benefits and synergies expected or predicted to occur as a result of the acquisition; (5) unexpected costs, liabilities or delays associated with the acquisition or the integration of the acquired business; (6) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect Pennsylvania American Water; and (7) other economic, business and other factors. Forward-looking statements are not guarantees or assurances of future performance or results, and Pennsylvania American Water and its affiliates do not undertake any duty to update any forward-looking statement.

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