- First-quarter 2022 diluted earnings of $0.87 per share, compared to $0.73 per share in 2021, a 19% increase
- 2022 earnings guidance range of $4.39 to $4.49 per share affirmed; long-term targets also affirmed
- Invested $437 million in the first three months of the year and added approximately 5,500 customer connections year-to-date through closed acquisitions and organic growth; capital plan on track to invest approximately $2.5 billion in 2022
USA: American Water Works Company, Inc has reported results for the quarter ended March 31, 2022, of $0.87 per share, compared to $0.73 per share in 2021.
“The company delivered a strong first quarter, continuing the company’s solid performance and consistent execution of our strategies,” said Susan Hardwick, president, CEO, and CFO of American Water.
“In the first three months of 2022, we invested $437 million in the regulated business with the majority dedicated to needed infrastructure improvements to better serve our customers as we begin to accelerate our investment spending made possible by the sale of Homeowner Services in late 2021,” said Hardwick. “We also look forward to welcoming additional customers through pending acquisitions in 2022, including the wastewater system in York, in the second quarter, as that acquisition was recently approved by the Pennsylvania Public Utility Commission.”
2022 Earnings Guidance and Long-Term Financial Targets Affirmed
The company affirms its 2022 earnings per share guidance range of $4.39 to $4.49. The company also affirms its long-term financial targets for the 2022-2026 period announced in Nov. 2021, including its long-term EPS compound annual growth rate target range of 7-9% and its long-term dividend growth expectation at the high end of a 7-10% range. As per company officials, these earnings forecasts are subject to numerous risks and uncertainties.
For the three months ended March 31, 2022, earnings were $0.87 per share, compared to $0.73 per share in the same period in 2021. This increase was primarily driven by increased revenues from the continued growth in infrastructure investment in the Regulated Businesses. Also, included in the 2022 results is $0.06 per share from interest income earned on the seller note and income earned on revenue share agreements from the sale of Homeowner Services in 2021.
The company is on track with its capital investment plan for the first three months of 2022 with investments of $437 million, including $430 million for infrastructure improvements in the Regulated Businesses. The company plans to invest a total of approximately $2.5 billion across its footprint in 2022.
For the first three months of 2022, Regulated Businesses’ net income was $160 million, compared to $135 million for the same period in 2021.
Operating revenues increased by $46 million in the first quarter of 2022 as compared to 2021 when excluding revenues contributed by the company’s New York subsidiary in 2021. The increase in operating revenues was primarily a result of authorized revenue increases resulting from completed general rate cases and infrastructure proceedings to recover incremental capital and acquisition investments.
To date, the company has been authorized additional annualized revenues, excluding agreed to reductions for EADIT, of approximately $48 million from general rate cases in 2022. In addition, approximately $31 million of additional annualized revenues from infrastructure surcharges have been authorized and are effective in 2022. The company has general rate cases in progress in five jurisdictions and has filed for infrastructure surcharges in two jurisdictions, reflecting a total annualized revenue request of approximately $220 million.
Operations and maintenance expense was higher by $8 million in the first quarter of 2022 as compared to 2021, when excluding impacts of the New York subsidiary in 2021, primarily due to increases in production costs from some inflationary pressure on chemicals and energy prices, while depreciation was higher by $8 million due to the growing capital investment.
First-quarter 2021 results included revenues of $23 million and operating expenses of $25 million for the company’s New York subsidiary which was sold on January 1, 2022.
For the 12-month period ended March 31, 2022, the company’s adjusted regulated O&M efficiency ratio (a non-GAAP financial measure) was 33.9%, a decrease from 34.1% for the 12-month period ended March 31, 2021. The ratio reflects the continued focus on operating costs, as well as an increase in operating revenues for the Regulated Businesses after considering the adjustment for the amortization of the EADIT shown below.
Market-Based Businesses and Other
For the first three months of 2022 and 2021, the net loss in Market-Based Businesses and Other was $2 million.
On March 1, 2022, the company paid a quarterly cash dividend of $0.6025 per share to shareholders of record as of February 8, 2022.
On April 27, 2022, the company’s Board of Directors declared a quarterly cash dividend payment of $0.6550 per share, an 8.7% increase over the prior quarterly dividend, payable on June 1, 2022, to shareholders of record as of May 10, 2022.
With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,400 dedicated professionals who provide regulated and regulated-like drinking water and wastewater services to more than 14 million people in 24 states.
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