American Water Works (AWK) Earnings Transcript | The Motley Fool
The Motley Fool
by newsfeedback@fool.com (Motley Fool Transcribing)February 19, 2026
AI-Generated Deep Dive Summary
American Water Works (AWK) reported strong financial results for 2025, with adjusted earnings per share (EPS) reaching $5.64, up 8.9% from the previous year. The company attributed this growth to rate increases, acquisitions, and customer expansion. Despite a slight rise in operating expenses due to higher power costs and employee-related expenses, AWK maintained disciplined financial planning and delivered results at the upper end of expectations.
The utility giant emphasized its multi-year capital investment strategy, spending approximately $3.2 billion in 2025 on critical infrastructure projects such as pipe replacement, treatment facility upgrades, PFAS remediation, lead service line removal, and smart metering technology. This focus on modernization aligns with pending rate cases in key jurisdictions like Pennsylvania, New Jersey, and Illinois, where AWK has invested over $1.2 billion, $1.4 billion, and $577 million respectively. The company’s debt-to-capital ratio remained stable at 59%, supported by strong liquidity and investment-grade credit ratings from S&P (A) and Moody’s (Baa1).
AWK also highlighted its approved merger with Essential Utilities, expected to close by Q1 2027, and ongoing municipal acquisition activity across six states. The company’s affordability metric ensures that residential water bills remain below 1% of median household income through 2035, addressing potential regulatory scrutiny. Proceeds from PFAS legal settlements are being returned to customers as state commissions approve payments.
Management underscored its commitment to maintaining a stable debt profile and leveraging equity issuance for continued infrastructure investment. The company’s long-term growth targets remain unchanged, with EPS and dividend growth projected at 7-9% annually through 2030 and beyond. AWK’s constructive regulatory environment and disciplined financial strategy position it as a leader in the utility sector, offering investors stability and steady returns.
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Originally published on The Motley Fool on 2/19/2026