Q2 2026 American Water Works Co Inc Earnings Call Transcript
Key Points
- Adjusted EPS grew 8% year-over-year in Q2 2026, reaching $1.61 per share.
- Successfully closed the Nexus Water Group acquisition ahead of schedule, adding 47,000 customer connections.
- Completed three rate cases in 2026 (West Virginia, Maryland, Pennsylvania) with nearly 100% capital investment recovery.
- O&M costs remained flat year-over-year, demonstrating effective cost control.
- Affirmed 2026 adjusted EPS guidance of $6.02-$6.12 and long-term 7%-9% EPS and dividend growth target through 2030.
- Pennsylvania rate case final order approved only $75 million of the requested $160 million annualized revenue increase.
- Total debt to capital ratio stood at 58% as of June 30, 2026, indicating elevated leverage.
- Merger with Essential Utilities remains pending, with closing expected by end of Q1 2027, creating regulatory uncertainty.
- Only about 40% of Pennsylvania capital expenditures qualify for recovery under the current DSIC mechanism, limiting interim recovery.
- Depreciation, financing costs, and general taxes increased as expected, pressuring net income growth.
Good morning and welcome to American Water's second quarter 2026 earnings conference call.
As a reminder, this call is being recorded and is also being webcast with 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, Aaron Musgrave, Vice President of Investor Relations. Mr. Musgrave, you may begin.
Good morning, everyone, and thank you for joining us for today's call. 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'll 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,
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