American Water Raises 2026 Earnings Guidance Floor to $6.07 per Share
Key Facts
American Water reported adjusted earnings of $2.00 per share for the third quarter ended September 30, 2026, compared with $1.89 in the same period last year, and narrowed its full-year guidance range to $6.07–$6.12 per share. The company said in a statement published through PR Newswire that the new range sits in the upper half of its previous forecast of $6.02–$6.12 per share. It also set a separate 2027 adjusted earnings range of $6.53–$6.63 per share, with expected midpoint growth of 8% compared with the 2026 range. For the first nine months, adjusted earnings rose to $4.63 per share from $4.40 in the comparable period. GAAP earnings were $1.94 per share for the quarter, unchanged year over year, and $4.56 year to date, compared with $4.47 a year earlier.
Operating revenue rose to $1.510 billion in the third quarter from $1.451 billion a year earlier, while net income attributable to common shareholders increased to $387 million from $379 million. The company said revenue benefited from approved increases following rate cases and infrastructure charges, along with the recovery of capital investments and completed acquisitions. Unfavorable weather, however, reduced quarterly revenue by $18 million, partially offsetting those factors. The comparison between adjusted and GAAP earnings shows more evident growth in the adjusted measure for the quarter, while earnings under the accounting standard remained at the level recorded in the comparable period. Net income attributable to shareholders was $387 million, up $8 million year over year.
Cost pressures offset some of the revenue improvement: operating expenses rose $30 million year over year, and depreciation expense increased $18 million during the quarter. The company attributed part of the expense increase to the cost of purchased water, usage, energy and chemicals. It also cited higher financing and operating costs among the factors offsetting the effects of new rates, investment recovery and acquisitions. Depreciation is significant for utilities with substantial infrastructure spending because it reflects the expansion of the asset base the company serves. The increase in these items did not prevent quarterly adjusted earnings from rising to $2.00 per share from $1.89 a year earlier.
American Water invested $2.8 billion in infrastructure improvements and growth projects during the first nine months of 2026, including $437 million for regulated acquisitions. The company plans total investment of about $3.7 billion during the year and said execution is proceeding on the announced schedule. Acquisitions added about 81,000 customer connections through September 30, including Nexus Water systems. This approach combines customer-base expansion with infrastructure development, while the company lists the recovery of capital investments and acquisitions among its sources of revenue support. This comes alongside continued increases in depreciation and operating expenses, which rose during the quarter.
On the regulatory front, the company has received approvals since the start of 2026 for annual revenue increases worth $284 million, including $179 million from general rate cases and $105 million from infrastructure charges. It has also filed additional requests under review with a combined annual value of $360 million. The company relies in part on regulatory approvals to pass through rate increases and recover the cost of infrastructure improvements, and cited these actions among the factors supporting quarterly revenue. The filed requests remain separate from approved increases, as they were still under review when the results were announced. This distinction allows the impact of approvals already secured to be read alongside potential revenue tied to pending requests.
On October 27, the board declared a quarterly cash dividend of $0.8950 per share, payable on December 1, 2026, to shareholders of record on November 12. The company scheduled a call to discuss quarterly results and its 2027 outlook for October 29 at 9 a.m. Eastern time. The call is expected to cover next year's separate earnings range, which the company set at $6.53–$6.63 per share. The dividend announcement comes as the company continues its roughly $3.7 billion capital investment plan for 2026. The call is the next announced opportunity to discuss the results and annual guidance.