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American Water Shows Outstanding Performance in 2025

American Water Works Company, Inc. (NYSE: AWK) recently announced its financial results for 2025, demonstrating strong performance across various metrics. The company reported a GAAP earnings per share (EPS) of $5.69, which is a notable increase from $5.39 in 2024. In the fourth quarter, the earnings remained steady at $1.22 per share, and has influenced the shareholder outlook positively.

The adjusted earnings for the year stood at $5.64 per share, after excluding $0.05 associated with the pending merger with Essential Utilities, marking an 8.9% increase compared to $5.18 in 2024. This strong performance exemplifies the successful execution of American Water's strategies, including infrastructure investment and capital acquisitions.

Key Achievements in 2025

American Water has not only shown impressive growth in EPS but has also declared dividend growth of 8.2% for the year. The company invested heavily—$3.2 billion for infrastructure improvements crucial to support water quality and reliability. This investment underlines American Water's commitment to enhancing service delivery.

President and CEO John Griffith expressed satisfaction with the execution of their EPS and dividend strategies, highlighting their achievement of the upper end of their earnings guidance for the year, which was set between $5.70 and $5.75 per share. Furthermore, American Water repaid a significant portion of the note related to the Homeowner Services Group, strengthening its financial standing even further.

Affirmed Guidance and Long-Term Targets

Looking forward, American Water has reaffirmed its 2026 adjusted EPS guidance range of $6.02 to $6.12, excluding potential transaction costs and weather impacts. Additionally, the company has set long-term growth targets for both EPS and dividends, projecting growth rates of 7-9%. This guidance reflects a firm belief in robust growth based on operational scalability and efficiency.

On February 10, 2026, shareholders of both American Water and Essential Utilities overwhelmingly approved merger-related proposals, which Griffith believes will enhance operational scale and the potential for further growth.

Operational Investments and Growth

The funds from the 2025 capital investment primarily focused on infrastructure improvements, with a portion allocated for acquisitions. The Regulated Businesses reported a net income of $1,137 million in 2025 compared to $1,065 million in the previous year, fueled by approved rates and operational efficiency. Only the fourth quarter of 2025 saw operating revenues increase significantly, attributing it to approved revenue increases from rate cases across various jurisdictions.

Partial achievements include additional authorized annualized revenues from upcoming general rate cases, as American Water strives to recover its incremental capital investments and maintain its service standards. Operating expenses did rise, due to higher employee-related costs and increased production expenses, but this was substantiated by the operational investments to ensure the efficient functioning of the services provided.

Conclusion: A Steady Path Ahead

With its solid footing in the market and well-defined growth strategy, American Water is not looking to slow down. The combination of robust financial performance in 2025, continued investments in infrastructure, and a commitment to enhancing shareholder value by maintaining consistent dividend growth positions them favorably for future challenges. Their earnings conference call scheduled for February 19, 2026, is expected to shed more light on the company’s future outlook and operational strategies.

As American Water moves forward, it remains dedicated to providing safe and reliable water services while effectively managing its growth trajectory in a competitive environment.