American Water Works 2025 Q2 Earnings Strong Performance as Net Income Rises 4.3%

American Water Works (AWK) reported its fiscal 2025 Q2 earnings on Jul 30th, 2025. The company delivered solid results, with earnings per share (EPS) reaching $1.48, compared to $1.42 in the same quarter of 2024, slightly below the Zacks Consensus Estimate of $1.49 per share. American Water also adjusted its 2025 EPS guidance, narrowing the range to $5.70-$5.75, in line with expectations. The company is on track with its 2025 capital investment plan, having already invested $1.3 billion through the first half of the year.

Revenue

The total revenue of American Water Works increased by 11.1% to $1.28 billion in 2025 Q2, up from $1.15 billion in 2024 Q2.

Earnings/Net Income

American Water Works's EPS rose 4.2% to $1.48 in 2025 Q2 from $1.42 in 2024 Q2, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $289 million in 2025 Q2, marking 4.3% growth from $277 million in 2024 Q2. Remarkably, in 2025 Q2, the company set a new record high for fiscal Q2 net income, the highest in 19 years. The EPS indicates stable financial performance.

Post-Earnings Price Action Review
The strategy of buying American Water Works (AWK) shares after a revenue increase quarter-over-quarter on the financial report release date and holding for 30 days resulted in poor performance over the past three years. This approach yielded a return of -62.59%, significantly underperforming the benchmark return of 87.61%. The excess return was -150.20%, with a compound annual growth rate (CAGR) of -17.95%, illustrating substantial losses over the period. Despite no additional downside risk during the holding period, the investment faced significant underperformance. This suggests that the approach of buying and holding AWK shares post-earnings has not been effective, highlighting the need for a reassessment of strategy.

CEO Commentary
"We are excited about the outlook for growth in the business," said John Griffith, President and CEO of American Water. Griffith emphasized that the company's solid results for the first half of the year are underpinned by continued investment in the communities served. He highlighted positive momentum in their acquisition strategy, specifically referencing the agreement to purchase Nexus Water Group systems in eight regulated states, which is aimed at leveraging the company's scale to deliver reliable water and wastewater services.

Guidance
The company's 2025 earnings per share guidance range has been narrowed to $5.70 to $5.75 from the previous $5.65 to $5.75, reflecting expectations on a weather-normalized basis. This range incorporates approximately $0.10 per share of incremental interest income. American Water affirms its long-term financial targets, including an EPS and dividend growth rate target of 7-9%. The forecasts remain subject to various risks and uncertainties as outlined in their SEC filings.

Additional News
American Water Works has been actively pursuing acquisitions to bolster its growth strategy. The company secured an agreement to purchase Nexus Water Group systems, expanding customer connections by approximately 87,000 across eight states. This acquisition aims to leverage American Water's scale and enhance service delivery. Additionally, American Water's Board of Directors declared a quarterly cash dividend of $0.8275 per share, payable on September 3, 2025, to shareholders of record as of August 12, 2025. In recent weeks, the company also released its annual sustainability report, highlighting its commitment to improving infrastructure and expanding regulated businesses, contributing to increased revenues.