Oct 29, 2026 earnings call — Merger progress and 2027 stand-alone guidance
American Water initiated 2027 stand-alone adjusted EPS guidance of $6.53 to $6.63 per share.
Revenue $1.5B (est $1.6B) · EPS $2.00 (est $2.04)
Key quotes
"Given these positive developments, we continue to expect the merger to close by the end of the first quarter of 2027."
"Slide 7 highlights that we are initiating our stand-alone adjusted earnings guidance for 2027 of $6.53 to $6.63 per share, reflecting 8% stand-alone EPS growth over 2026."
"So beginning with 2027, we expect our investment level to be $4.1 billion, inclusive of acquisitions."
Analyst Q&A 6
When you'll give merged guidance
Q (Shahriar Pourreza · Wells Fargo): When will investors get updated guidance for the merged company? Also asked about the status of Peoples and whether retaining it is possible.
A: They said guidance will be given after the merger closes, likely sometime in the first quarter, and they will need time to sort through the Peoples period. On Peoples, they will review strategic alternatives after close and said everything is on the table.
"It will be after we close, sometime after we close depending on when that is in the first quarter." — David Bowler
Timing of 2027 guidance and interest rates
Q (Nicholas Campanella · Barclays): How does WTRG skipping its water filing affect the merger accretion and the 7%–9% plan? Also asked whether the interest-rate assumptions for the $1.4 billion 2029 debt use current rates and what equity needs look like.
A: They said they will update 2027 guidance after the merger is closed and provide an update then. On interest rates, they said they are not overly aggressive or conservative and are assuming a middle-of-the-road view for refinancings, and they affirmed 7% to 9% on a stand-alone basis.
"As I just said, we'll come out and update guidance for '27 once we get the merger closed and provide you an update at that point." — David Bowler
Long-term growth baseline and CA project
Q (Paul Zimbardo · Jefferies): Should 2027 stand-alone be the baseline for long-term EPS guidance, or will you use a pro forma 2027? Also asked for more detail on the California desalination project and the $825 million figure.
A: They said you can think about 7% to 9% long-term in any way you slice it and they are not setting a new baseline year for '27. For the California desalination project, they said the project is in their forecast and the full cost is included in their 5- and 10-year forecast period.
"Yes, I think the way we -- Paul, the way we've positioned this and said it before that you can think about 7% to 9% for us in the long term, any way you slice it." — David Bowler
How much 2027 revenue is locked in
Q (Anthony Crowdell · Mizuho): How much of the $1.70 to $1.80 revenue range for 2027 is already locked by rate decisions vs still pending? Also asked how you will announce revised guidance after merger approval (earnings call or 8-K).
A: They said the vast majority of that revenue is locked in, noting timing of Pennsylvania and New Jersey cases and other rate cases that will affect '27, and that New Jersey and Pennsylvania represent 40% to 45% of the business. For revised guidance, they said it depends on when they get final approval and they will come back as soon as they get the approval.
"I'd say the vast majority of it is locked in when you think about the timing of the PA and New Jersey cases this year coming in the fourth -- late in the third quarter." — David Bowler
Size of capital plan and regulatory risk
Q (Gregg Orrill · UBS): Does the updated capital plan to 2030 (now $20 billion plus) signal anything new, and is regulatory lag a risk you are highlighting?
A: They said they are not seeing regulatory lag issues to highlight as a risk. Internally the plan sits on the north side of the $19 billion to $20 billion range, which is why they described it as $20 billion plus, and they did not roll forward the full plan here.
"No. Gregg, we're not seeing any regulatory lag issues that we're highlighting as a risk here." — David Bowler
How gas (Peoples) fits the long-term view
Q (Richard Sunderland · Truist): Will you include Peoples (gas) in the long-term view or offer plans both with and without it? Also asked about the Pennsylvania LTIP filing process and timing to a decision.
A: They said they still expect to maintain long-term EPS growth at 7% to 9% with or without Peoples. On the Pennsylvania LTIP, they said the filing went through the typical LTIP review process that occurs every 5 years, the commission must rule, and they allowed a longer timeline aiming for a decision by the end of '27.
"Yes, the filing did go through the typical process for the LTIP review, which occurs every 5 years." — David Bowler