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Mar 31
Cal Water Q1 2025 Earnings Report
California Water Service Group reported its first quarter 2025 financial results, highlighting a decrease in GAAP net income and revenue compared to the prior year, but an increase in non-GAAP net income and diluted earnings per share.
Key Takeaways
California Water Service Group reported Q1 2025 net income attributable to the Group of $13.3 million, or $0.22 per diluted share, a decrease from the prior year due to the non-recurrence of 2023 interim rate relief. However, non-GAAP net income and diluted earnings per share increased compared to Q1 2024 non-GAAP figures. Operating revenue was $204.0 million, a decrease from Q1 2024 GAAP revenue but an increase compared to Q1 2024 non-GAAP operating revenue.
Net income attributable to Group decreased by $56.6 million to $13.3 million, or $0.22 per diluted share, compared to Q1 2024, primarily due to the non-recurrence of 2023 interim rate relief.
Non-GAAP net income and diluted earnings per share increased by $9.2 million and $0.15, respectively, compared to Q1 2024 non-GAAP figures.
Operating revenue decreased by $66.7 million to $204.0 million compared to Q1 2024 GAAP revenue, but increased by $23.5 million compared to Q1 2024 non-GAAP operating revenue.
The company declared its 321st consecutive quarterly dividend of $0.30 per share, with an expected annual dividend of $1.24 per common share including a special one-time dividend.
Cal Water
Cal Water
Cal Water Revenue by Geographic Location
Revenue by Geographic Location
California Revenue
CapyFin.com Forward Guidance
The company is focused on achieving a timely and constructive resolution to its 2024 California GRC to support infrastructure investment and long-term service reliability. They anticipate continued progress on the 2024 California GRC, with evidentiary hearings expected in May 2025. The Hawaii Water Service 2024 Ka'anapali GRC settlement was approved, with rate changes expected in May 2025.
Positive Outlook
- Continued on-time progress on the 2024 California General Rate Case and Infrastructure Improvement Plan (2024 California GRC).
- Anticipated timely and constructive resolution to the 2024 California GRC, critical for infrastructure investment and long-term service reliability.
- Approval of 2025 escalation rate increases for 18 regulated districts, adding $27.2 million in annual adopted gross revenue.
- Approval of Cal Water's request to include $14.2 million of incremental capital costs in rate base for the Palos Verdes Peninsula Water Reliability Project.
- Approval of Cal Water's request to recover $1.4 million of incremental costs tracked in the California Drought Memorandum Account (DRMA).
Challenges Ahead
- The 2024 California GRC process is ongoing, with evidentiary hearings expected in May 2025, indicating continued regulatory uncertainty.
- Cal Water was unable to reach a global settlement with California Public Advocates (Cal PA) regarding the 2024 GRC.
- Potential for opposition to rate increases, which could impact financial performance.
- Risks associated with the outcome and timeliness of regulatory commissions' actions concerning rate relief and other matters.
- Impact of changes in state regulatory commissions' policies and procedures, such as the CPUC's decision in 2020 to preclude companies from proposing fully decoupled WRAMs.