American States Water Company (AWR) Q2 2024 earnings summary

Executive summary

• Q2 2024 diluted EPS was $0.85, down from $1.04 in Q2 2023; adjusted EPS was $0.85 vs. $0.86 year-over-year, reflecting normalization after prior period regulatory adjustments.

• Settlement agreement reached in water utility rate case, authorizing $573.1 million in capital investment for 2025–2027, pending CPUC approval.

• Contracted services segment began operations at two new military bases, with contracts valued at $378 million and $75 million, boosting segment earnings.

• Quarterly dividend increased 8.3% to $0.4655 per share, marking 70 consecutive years of annual dividend increases.

• Q2 2024 earnings were lower year-over-year due to higher operating and interest expenses, absence of prior year nonrecurring regulatory adjustments, and delayed electric rate case decision, partially offset by higher ASUS earnings and water rate increases.

Financial highlights

• Q2 2024 consolidated diluted EPS was $0.85; adjusted EPS decreased $0.01 year-over-year.

• Q2 2024 operating revenues were $155.3 million, down $2.1 million year-over-year; water segment revenue down $6.5 million, contracted services up $4.5 million.

• Q2 2024 net income was $31.9 million, down from $38.5 million in Q2 2023; YTD net income was $55.0 million, down from $72.9 million.

• Q2 2024 operating income was $51.7 million, down from $58.9 million in Q2 2023.

• Operating cash flow for H1 2024 was $70.5 million, up from $17.8 million in H1 2023.

Outlook and guidance

• Projected 2024 capital expenditures at regulated utilities: $170–$200 million.

• Contracted services segment expected to contribute $0.50–$0.54 per share for full year 2024.

• Water utility settlement, if approved, will set new rates and support significant capital investment through 2027.

• Decision on water and electric general rate cases expected by end of 2024, with new rates retroactive to January 2023 for electric.

• Adopted operating revenues less water supply costs for 2025 projected to increase by $23 million over 2024, with potential $20 million annual increases in 2026 and 2027.