American Water Works (AWK -0.38%), a leading water and wastewater utility company, unveiled its first-quarter 2024 results on May 1. Despite earnings per share (EPS) missing analyst expectations slightly at $0.95 versus forecasts of $0.98, revenue exceeded estimates at $1.011 billion against an estimate of $962 million. This performance marks a positive trajectory, reflecting operational efficiency and growth momentum.
| Metric | Q1 2024 Actual | Analyst Estimate | Q1 2023 Actual | Change (YOY) |
|---|---|---|---|---|
| EPS | $0.95 | $0.98 | $0.91 | 4.4% |
| Operating revenue | $1 billion | $962 million | $938 million | 7.8% |
| Regulated business net income | $185 million | N/A | $174 million | 6.3% |
Company results from company. Analyst estimates from FactSet.
Company overview
American Water Works serves millions of people by providing essential water and wastewater services. It has regulated operations in 14 states and on 18 military installations.
Recent strategic focuses include significant investments in infrastructure -- supporting operational efficiency and regulatory compliance -- and leveraging acquisitions to fuel growth and enhance service quality.
Quarterly highlights
This quarter showcased American Water Works' continued execution of strategic investments and operational enhancements. The company put $634 million into infrastructure improvements and replacements and spent $86 million to complete the acquisition of the wastewater treatment plant of Granite City, Illinois, which has 26,000 customer connections.
The company bumped its dividend up 8% to $0.765 per share of common stock.
Revenue increases were largely attributed to rate adjustments in regulated businesses and strategic acquisitions, underscoring the company's successful navigation of regulatory landscapes and market expansion efforts. The company's overall financial health remains strong, highlighted by a year-over-year net income increase in regulated businesses from $174 million to $185 million.
One-time events, including an ambitious $1.4 billion debt offering and an uptick in interest income by $0.02 per share.
Looking forward
Looking ahead, American Water Works remains optimistic, with management signaling ongoing commitment to its capital investment strategy, aimed at enhancing infrastructure resilience and service quality. Notably, the company plans to uphold its robust dividend growth trajectory.
Investors are encouraged to monitor the company's execution of its $3.1 billion annual capital investment plan and any regulatory shifts that may impact its rate-making strategy.
