American Water Surges Ahead: Q3 Earnings Show Strength and Merger Momentum
American Water, a leading utility company in the United States, has reported strong third-quarter earnings that surpass expectations. The company's President and CEO, John Griffith, highlighted the significance of these results during the company's Q3 2026 conference call.
Mr. Griffith expressed his excitement about the proposed merger with Essential Utilities, which was announced a year ago this week. He emphasized that the combination of the two top-notch teams will create a value proposition uniquely compelling in the utility sector. The merger is expected to drive growth and value creation, ultimately benefiting all stakeholders.
The company has made significant progress in achieving state approvals related to the merger. In addition to the three states where approval was achieved in the first half of the year (Kentucky, Ohio, and Virginia), American Water has reached constructive settlements in Pennsylvania, Texas, and North Carolina since mid-year. Settlement discussions are ongoing in New Jersey, with an expected order in Illinois soon following a favorable recommendation from the Administrative Law Judge.
The federal Hart-Scott-Rodino waiting period expired in mid-August, satisfying one of the closing conditions for the merger. Given these positive developments, American Water continues to expect the merger to close by the end of the first quarter of 2027.
Turning to standalone results, American Water delivered solid financial performance in the third quarter and nine months of the year. Adjusted earnings were $2 per share for the third quarter, compared to $1.89 per share for the same period last year. In the first nine months of 2026, adjusted earnings were $4.63 per share, compared to $4.40 per share in the same period of 2025.
The company's results reflect strong execution of its plan in 2026, which David and Cheryl will discuss further in their remarks. With these results combined with an outlook for the rest of the year, American Water now expects to achieve the top half of its initial EPS guidance range for 2026, narrowed to $6.
The proposed merger with Essential Utilities is a significant development that has garnered attention from investors and industry observers alike. As American Water continues to make progress towards closing this deal, stakeholders can expect ongoing updates on the company's performance.
