American States Water Company ((AWR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call of American States Water Company was marked by a generally positive sentiment, underscoring robust earnings growth and increased revenue. The company celebrated successful contract awards for ASUS and received recognition for its sustainability and performance. However, there were acknowledgments of challenges, particularly concerning higher operating expenses and potential revenue volatility due to regulatory changes.
Increase in Earnings Per Share
The company reported a significant increase in earnings per share for the third quarter, which was $0.11 higher than the same period last year. This represents an 11.6% increase, showcasing the company’s strong financial performance.
Revenue Growth
American States Water Company experienced a notable increase in consolidated revenue, which rose by $21 million compared to the third quarter of 2024. The water segment contributed $8.3 million, the electric segment $4.3 million, and ASUS $8.4 million to this growth.
ASUS Contract Awards
ASUS, a subsidiary of American States Water Company, was awarded $28.7 million in new capital upgrade construction projects during the first nine months of the year. These projects are expected to be completed by 2028, indicating a strong pipeline of future work.
Recognition on Prominent Lists
The company earned a spot on Times America’s Best Midsize Companies 2025 list and Barron’s 100 Most Sustainable Companies for 2025. This recognition highlights the company’s commitment to sustainability and operational excellence.
Dividend Increase
American States Water Company announced an 8.3% increase in its dividend, maintaining a compound annual growth rate of 8.5% over the past five years. This increase reflects the company’s ongoing commitment to returning value to its shareholders.
Higher Operating Expenses
The company faced higher operating expenses, which increased by $10.3 million compared to 2024. This rise was attributed to higher ASUS construction expenses and increased overall operating costs.
Volatility in Revenues and Earnings
The transition from a full decoupling mechanism to a modified rate adjustment mechanism and an incremental cost balancing account for supply costs may introduce future volatility in the company’s revenues and earnings.
Forward-Looking Guidance
Looking ahead, American States Water Company provided optimistic guidance, with an 11.6% increase in earnings per share driven by new water and electric rates and increased construction activities from ASUS. The company is on track to invest between $180 million and $210 million in infrastructure for its regulated utilities in 2025. ASUS is expected to contribute $0.59 to $0.63 per share in 2025, reinforcing its role in the company’s growth strategy.
In conclusion, the earnings call of American States Water Company painted a picture of robust growth and strategic advancements, despite some challenges. The company demonstrated strong financial performance, with increased earnings and revenue, successful contract awards, and notable recognitions. However, it also faces higher operating expenses and potential revenue volatility. Overall, the sentiment was positive, with a clear focus on sustainable growth and shareholder value.