Q4 2024 American Water Works Company Inc Earnings Call Transcript
Key Points
- American Water Works Co Inc (AWK) delivered 2024 financial results in line with expectations, achieving earnings of $5.39 per share, reflecting an 8% EPS growth.
- The company successfully completed several significant general rate cases in 2024, driven by necessary infrastructure investments, enhancing service reliability for over 14 million people.
- AWK invested over $3 billion in 2024, including acquisitions that added nearly 70,000 customer connections, meeting their 2% compounded annual growth target.
- The company affirmed its 2025 earnings guidance of $5.65 to $5.75 per share, expecting 8% EPS growth, and maintained a strong financial position with a debt-to-cap ratio of 57%.
- AWK's capital investment program is expected to grow the regulated rate base at a long-term rate of 8% to 9%, with a focus on customer affordability and infrastructure renewal.
- The company faces ongoing challenges with regulatory environments, as seen in California where a full decoupling mechanism was not recognized, prompting a motion for rehearing.
- Operating costs increased by $0.22 per share in 2024, driven by employee-related costs and production costs related to fuel, power, and chemicals.
- AWK's acquisition growth is described as 'lumpy,' with potential delays in closing processes affecting the consistency of customer growth through acquisitions.
- The company anticipates issuing $2.5 billion of external equity from 2025 to 2029, which could be dilutive and is subject to market conditions.
- Despite strong execution, AWK continues to face challenges related to declining water usage per customer, which could impact future revenue growth.
Good day and welcome to the American Water fourth quarter and year-end 2024 conference call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Aaron Musgrave, VP of Investor Relations. Please go ahead.
Thank you, Cindy. Good morning, everyone, and thank you for joining us for today's call. At the end of our prepared remarks, we will open the call for your questions. Let me first go over some Safe Harbor language.
Today, we will be making forward-looking statements that represent our expectations regarding our future performance or other future events. These statements are predictions based on our current expectations, estimates, and assumptions.
However, since these statements deal with future events, they're subject to numerous known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from the results indicated or implied by such
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