American Water Works Co. Inc

American Water Works delivered a modest earnings miss in Q4 2025, posting adjusted EPS of $1.24 against a consensus estimate of $1.27, a shortfall of 2.29%, while revenue of $1.27 billion trailed the $1.29 billion estimate by 1.27%, despite rising 5.8% year-over-year. The primary engine behind that top-line growth was the Regulated Businesses segment, where authorized rate increases from completed general rate cases and infrastructure surcharge proceedings added $61 million in quarterly operating revenues, though rising depreciation, employee-related costs, and interest expense, the latter climbing $12 million in Q4 alone to fund capital investments, weighed on the bottom line. Full-year adjusted EPS reached $5.64, up from $5.18 in 2024, landing in the upper half of guidance when excluding transaction costs tied to the pending Essential Utilities merger, which received shareholder approval from both companies in February 2026. Looking ahead, management affirmed 2026 adjusted EPS guidance of $6.02 to $6.12, supported by $573 million in pending annualized rate case requests across seven jurisdictions and long-term EPS and dividend growth targets of 7-9%, as broader water utility peers navigate similarly rising cost pressures.