California Water Service Group (CWT) Q3 2024 Earnings Call Highlights: Strong Revenue Growth ...

GuruFocus News
4 min read

In This Article:

  • Operating Revenue: Increased 17.5% to $299.6 million in Q3 2024 from $255 million in Q3 2023.

  • Net Income: $60.7 million or $1.03 per diluted share in Q3 2024, compared to $34.4 million or $0.60 per diluted share in Q3 2023.

  • Operating Expenses: $232.8 million in Q3 2024, up from $211.5 million in Q3 2023.

  • Year-to-Date Operating Revenue: Increased to $814.6 million in 2024 from $580 million in 2023.

  • Year-to-Date Net Income: $171.1 million or $2.93 per diluted share in 2024, compared to $21 million or $0.38 per diluted share in 2023.

  • Capital Investments: $332.2 million for the nine-month period ended September 30, 2024, representing 86% of the $385 million 2024 capital budget.

  • Rate Base Growth: Projected to grow to $2.36 billion by the end of 2024, a 7.3% increase over 2023.

  • Capital Structure: 61% equity and 39% debt.

  • Cash and Cash Equivalents: $105.2 million as of September 30, 2024, with $45.6 million classified as restricted.

  • Short-term Borrowing Capacity: $340 million available on company and Cal Water lines of credit.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • California Water Service Group (NYSE:CWT) reported a 17.5% increase in operating revenue for Q3 2024, reaching $299.6 million compared to $255 million in Q3 2023.

  • Net income for Q3 2024 was $60.7 million or $1.03 per diluted share, a significant increase from $34.4 million or $0.60 per diluted share in Q3 2023.

  • The company received approval from the California Public Utilities Commission to collect $94.2 million in regulatory balances through 2027.

  • CWT has invested a record amount of capital in 2024, with $332.2 million spent on water infrastructure improvements by September 30, 2024.

  • The company was recognized for its environmental leadership, receiving the WaterSense Excellence Award from the US Environmental Protection Agency for the second consecutive year.

Negative Points

  • Operating expenses increased by $21 million in Q3 2024, primarily due to higher water production costs and increased depreciation and amortization.

  • The Monterey Water Rate Adjustment Mechanism (MWRAM) saw a $9.4 million reduction, impacting revenue.

  • Higher income taxes related to increased pretax earnings contributed to a rise in operating expenses.

  • The company faces significant future capital investment needs, including $226 million for PFOS projects starting in Q4 2024.

  • There is uncertainty regarding the CPUC's stance on decoupling, which could impact future rate structures and revenue.

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