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**Summary:**

American Water Works (AWK) reported strong revenue growth in Q2 2025, exceeding analyst expectations, driven by regulatory progress and acquisitions, particularly the Nexus Water Group deal. However, GAAP earnings per share missed estimates due to increased operating and financing costs linked to higher capital investment and acquisition integration. The company is navigating complex regulatory environments and investing heavily in infrastructure. Despite weather impacts and rising costs, American Water Works reaffirmed its long-term earnings and dividend growth targets and raised its quarterly dividend by 8.2%. The company tightened its full-year 2025 earnings guidance to $5.70 to $5.75 per share on a weather-normalized basis, up from a previous range of $5.65 to $5.75.

**News Article:**

**American Water Works Reports Strong Revenue Growth, But Earnings Fall Short of Expectations in Q2**

**[City, State] – July 30, 2025** – American Water Works (NYSE: AWK), the nation’s largest publicly traded water and wastewater utility, today announced its second-quarter 2025 results, revealing a mixed performance. While revenue soared by 11.1% to $1.276 billion, surpassing analyst predictions of $1.217.25 billion, GAAP earnings per share (EPS) of $1.48 fell short of the estimated $1.52.

The company attributed the strong revenue growth to successful rate increases and strategic acquisitions, including a significant acquisition of Nexus Water Group operating systems. Regulated revenue increased substantially, reflecting the positive impact of new rate cases and system purchases.

However, increased operating and interest expenses weighed on earnings. Higher employee-related and technology costs, taxes on new capital investment, and costs associated with acquisition integration contributed to the expense surge. Interest expenses also increased due to debt financing of ongoing capital projects, which totaled $1.3 billion in the first half of 2025 alone.

American Water Works has tightened its full-year 2025 earnings guidance to $5.70 to $5.75 per share on a weather-normalized basis, up from a previous range of $5.65 to $5.75. Management continues to affirm long-term targets for earnings and dividend growth of 7% to 9%.

Regulatory progress remains a key focus for the company. New and ongoing rate cases have authorized $270 million in regulated annualized revenue since the start of the year, with pending requests for an additional $126 million. Legislative actions in several states are also aimed at streamlining the regulatory process, although “regulatory lag” remains a concern.

Despite the earnings miss, American Water Works demonstrated confidence in its future by raising its quarterly dividend by 8.2% to $0.8275 per share. The company reaffirmed its commitment to infrastructure investment and growth through acquisitions, projecting continued capital expenditures to meet both regulatory obligations and the need for system upgrades. Investors are advised to monitor the closing and integrating of acquisitions, developments in state-level regulation for rate cases and environmental requirements, as well as any shifts in cost trends—particularly for labor and financing.

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