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Dec 31, 2022
SJW Group Q4 2022 Earnings Report
SJW Group's financial performance increased due to cumulative water rate increases and the net recognition of balancing and memorandum accounts and regulatory mechanisms.
Key Takeaways
SJW Group reported increased operating revenue and net income for the fourth quarter of 2022, primarily driven by the net recognition of balancing and memorandum accounts and regulatory mechanisms and cumulative water rate increases. The company's 2022 diluted earnings per share increased by 20% over the prior year.
Operating revenue increased by $31.7 million compared to the same period in 2021, reaching $171.4 million.
Net recognition of balancing and memorandum accounts and regulatory mechanisms contributed $21.0 million to the revenue increase.
Cumulative water rate increases added $14.5 million to the revenue.
Operating expenses increased to $121.0 million, compared to $108.1 million in the same period of 2021.
Forward Guidance
SJW Group's 2023 guidance assumes constructive outcomes in the SJWC Cost of Capital proceeding, a GRC in Maine, and a Water Infrastructure and Conservation Adjustment in Connecticut. It also assumes average weather conditions in Maine and Texas, and revenue protection in California and Connecticut.
Positive Outlook
- Net income per diluted common share of $2.40 to $2.50.
- Non-linear long-term diluted EPS growth of 5% to 7%, anchored off of 2022 diluted EPS of $2.43.
- Regulated infrastructure investments of approximately $255 million in 2023.
- New rates in California will increase annual revenues in 2023 by $18.4 million.
- The rate increases in Maine are retroactive back to January 1, 2023, and authorize a $692,000 increase in annual revenues.
Challenges Ahead
- Guidance is subject to risks and uncertainties.
- Factors outlined in the “Forward Looking Statements” of this release.
- The “Risk Factors” section of the company’s annual and quarterly reports filed with the Securities and Exchange Commission.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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