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Dec 31, 2023
American Water Q4 2023 Earnings Report
Reported strong results and increased 2024 EPS guidance due to note restructuring.
Key Takeaways
American Water reported Q4 2023 earnings of $0.88 per share, compared to $0.81 per share in 2022. The company invested a record $2.7 billion in regulated operations and completed 23 acquisitions across eight states in 2023. 2024 earnings per share guidance range increased to $5.20 to $5.30 from $5.10 to $5.20 as a result of interest income on a legacy note restructuring
Q4 2023 earnings per share were $0.88, compared to $0.81 per share in 2022.
Full year 2023 earnings were $4.90 per share, compared to $4.51 per share in 2022.
Invested $2.7 billion in capital in 2023, increasing rate base by 10.7% year-over-year.
2024 earnings per share guidance range increased to $5.20 to $5.30 from $5.10 to $5.20 as a result of interest income on a legacy note restructuring.
Forward Guidance
The company expects its 2024 earnings per share guidance range to be $5.20 to $5.30, up from the EPS guidance range of $5.10 to $5.20 announced in Nov. 2023, as the company will receive increased interest income resulting from the amendment to the terms of the secured seller note receivable related to the sale of the former Homeowner Services Group (“HOS”).
Positive Outlook
- Increased interest income from the amended secured seller note.
- Successful completion of the extension of agreements with the New York City Water Board.
- Increase in the principal amount of the secured seller note from $720 million to $795 million.
- Increase in the interest rate payable in cash on the secured seller note from 7.00% per year to 10.00% per year until maturity.
- Affirms long-term growth targets.
Challenges Ahead
- Earnings forecasts are subject to numerous risks and uncertainties.
- Decisions of governmental and regulatory bodies.
- Changes in customer demand for water and energy.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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