Now I have enough to write a comprehensive preview.# American Water Works (AWK) — Q2 2026 Earnings Preview
Report date: Wednesday, July 29, 2026, after market close (call Thursday, July 30, 9:00 a.m. ET) Current price: ~$138 (roughly flat since April, after dipping to ~$122 in late May/June and recovering through July)
AWK enters this print with guidance intact but a recent history of modestly missing consensus. In Q1 2026, adjusted earnings were $1.01 per share, compared to $1.02 per share for the same quarter in 2025, and management framed the quarter as "right on track to achieve our full year earnings guidance, which we are pleased to affirm again this quarter, along with our long-term targets." Importantly, CFO David Bowler flagged that "the majority of our EPS growth will occur in the second half of the year with revenue increases in key states expected to go into effect in Q3," which is the key lens for judging Q2.
Consensus for Q2 2026: EPS of $1.59 (+7.43% y/y) on revenue of ~$1.28 billion (roughly flat y/y). Notably, AWK's model doesn't point to a beat this quarter, and the company came off a Q1 print where it missed estimates — worth watching whether that pattern repeats given O&M cost pressure still working through the P&L.
Because water utility earnings are a function of rate base growth and timely rate recovery, the regulatory docket is the most important input this quarter:
Cumulatively, since January 1, 2026, the company has been authorized additional annualized revenues of $89 million, with $36 million from general rate cases and $53 million from infrastructure surcharges, and it has general rate cases in progress in five jurisdictions... reflecting a total annualized revenue request of $518 million as of Q1. Watch for an updated tally on the Q2 call — a strong step-up would validate the H2 acceleration story.
AWK's pending merger with Essential Utilities remains a multi-quarter workstream. As of the Q1 call: management filed all required state regulatory approvals prior to the end of 2025... received our first state approval for the merger in Kentucky... expect to receive the next decision in Virginia in June. In other states, including in Pennsylvania and New Jersey, the cases are proceeding as planned with procedural schedules expected to continue through the summer and early fall, with a Hart-Scott-Rodino notification application related to the proposed Essential Utilities merger planned for late summer, and the merger to close by the end of the first quarter 2027. Investors should listen for: (1) the Virginia and Illinois decisions (both due this calendar year per statute), (2) any commentary on Pennsylvania/New Jersey "affirmative public benefit" hearings, and (3) confirmation that HSR filing is on track. CEO Griffith has stressed that "you need all of the required approvals before we can close the transaction," so any state-level friction is a real timeline risk.
AWK closed its acquisition of Nexus Water Group's regulated systems on June 1, 2026 — a deal covering water/wastewater assets across Illinois, Indiana, Kentucky, Maryland, New Jersey, Pennsylvania, Tennessee and Virginia for approximately $315 million, adding roughly 47,000 customer connections and about 70 employees, with all required regulatory approvals obtained prior to closing. This directly supports the ~2% annual customer-growth-through-acquisition target management has emphasized, alongside 105,000 customer connections currently under agreement from deals totaling $565 million disclosed on the Q1 call.
The board raised the quarterly dividend 8.2% to $0.8950/share (paid June 2), continuing a decade-long streak of growth that management says has outpaced peers, and reaffirmed a 7–9% long-term EPS and dividend growth framework. At the current ~$138 share price, the annualized dividend of $3.58 implies a yield of roughly 2.6%, and the stock trades around 22.7x the midpoint of 2026 adjusted EPS guidance ($6.02–$6.12) — a valuation investors will judge against the durability of the 7–9% growth algorithm reaffirmed each quarter.
A reminder of the operating environment: federal agencies issued an updated advisory that Iranian hackers were targeting programmable logic controllers on internet-connected operational networks, allowing them to manipulate data on their displays, causing outages and disruption, with warnings that "potentially all internet exposed" industrial control systems may be affected across water and energy infrastructure broadly. There's no indication AWK itself has been targeted, but this underscores an industry-wide cybersecurity/OT-security risk factor that could surface in the Q&A given AWK's scale (14 million people served, 18 military installations).
Bottom line: This is a "show me the second half" quarter for AWK. The core guidance ($6.02–$6.12 adjusted EPS, 7–9% long-term EPS/dividend growth) is unchanged and the regulatory pipeline (especially the Pennsylvania decision) has moved constructively just ahead of the print. The main swing factors are whether Q2 results and commentary validate the back-half-weighted growth trajectory, progress on the Essential Utilities merger approvals, and any signal on reduced equity needs from the CAMT tax benefit.