ARTESIAN RESOURCES CORP (ARTNA)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered year-over-year growth: revenue $26.85M vs $24.55M and diluted EPS $0.37 vs $0.34, driven by higher water sales from prior rate increases and increased consumption/customers .
• Results beat Wall Street consensus: EPS $0.37 vs $0.32* and revenue $26.85M vs $25.00M*; strength was revenue-led, with non-utility revenue steady and other utility revenue up .
• Operating margins remain pressured by rising energy and treatment costs; management signaled timely filings to recover investments and costs in rates .
• Dividend cadence supports the equity story: quarterly dividend increased 2% to $0.3014 in Nov 2024 and was maintained in Jan 2025, underscoring balance-sheet stability and shareholder return focus .

What Went Well and What Went Wrong

What Went Well

• “Improved earnings in 2024” with $45.9M invested in infrastructure to ensure resilient water/wastewater systems, reinforcing long-term service quality and regulatory positioning .
• Q4 water sales revenue rose $1.9M, primarily from the Nov 28, 2023 rate increase and higher consumption/customers; other utility operating revenue up ~$0.4M, consistent with customer growth in wastewater .
• AFUDC increased by ~$0.3M in Q4 on higher long-term construction subject to AFUDC, supporting other income .

What Went Wrong

• Operating expenses rose $2.0M (+14.1%) in Q4, with utility OpEx up $1.8M (+15.5%) due to payroll/benefits, supply/treatment, T&D/collection, and admin costs, compressing operating margins .
• CFO flagged ongoing margin pressure from rising energy and water treatment costs; management expects timely regulatory filings for cost recovery, highlighting a key execution/regulatory dependency .
• Property and other taxes increased (+$0.1M, +11.9% federal/state taxes; +$0.045M YoY property taxes in Q4; full-year property taxes +$0.2M, +3.6%), reflecting higher utility plant tax base and county rate increases .

Financial Results

Core quarterly comparison (actuals)

Operating leverage and margins

Segment breakdown (Q4 year-over-year)

KPIs and balance sheet highlights

Comparison to estimates (Q4 2024)

Bolded implications: both revenue and EPS were significant beats versus consensus in Q4 2024.

Guidance Changes

No formal numerical revenue/EPS margin guidance ranges were provided in the documents reviewed for Q4 2024; management provided qualitative guidance around regulatory recovery and cost pressures .

Earnings Call Themes & Trends

Note: An earnings call transcript for Q4 2024 was not available in the document set reviewed.

Management Commentary

• “I am pleased to report improved earnings in 2024 as we remain focused on critical investments in infrastructure and managing costs…we invested $45.9 million in infrastructure” — President & CEO Nicholle Taylor .
• “Our 2024 financial results benefitted from…settlement…of our 2023 rate filing…However, ongoing needed investments…and rising costs…continue to pressure our operating margins. [We] necessitate timely filing for and recovery of needed investments…in rates.” — CFO David Spacht .
• “We are pleased to report an increase in water sales revenues as a result of new customers served, higher customer consumption and the resolution of our Delaware water rate case.” — CEO Dian C. Taylor (Q3 context) .
• “Artesian continues to proactively invest in water quality initiatives…PFAS contamination and lead in water service lines…” — President Nicki Taylor (Q3 context) .

Q&A Highlights

An earnings call transcript for Q4 2024 was not available; therefore, no Q&A themes or clarifications can be reported from primary sources.

Estimates Context

• Q4 2024 revenue and EPS both exceeded consensus: $26.85M actual vs $25.00M*, and $0.37 vs $0.32*; coverage was limited (one estimate for each) .
• Given the beat and management’s commentary on cost recovery plans, estimates may move modestly higher on revenue but remain cautious on margin trajectory due to energy/treatment cost inflation and tax/property cost trends .

Estimates vs Actuals (Q4 2024)

Key Takeaways for Investors

• Revenue beat and EPS beat in Q4 2024 with water sales uplift from prior rate increases and higher consumption/customers; both key top-line drivers appear durable into 2025 .
• Margin pressure is the central watch item: OpEx growth (+14.1% YoY in Q4) and energy/treatment costs necessitate disciplined regulatory recovery; management is prepared to file for timely recovery .
• Capex execution ($45.9M in 2024) and AFUDC recovery support long-term asset base growth and earnings visibility, while aligning with emerging regulatory requirements (PFAS/lead) .
• Dividend consistency and recent increase to $0.3014 support the yield profile, with subsequent maintenance into Q1 2025, signaling confidence in cash generation and balance-sheet health .
• Regulatory rate case resolution (final rates effective Jun 12, 2024) underpins pricing stability and depreciation rate updates, improving revenue quality and cash flow mechanics .
• Near-term stock narrative: revenue resilience and dividend support vs. margin headwinds; catalysts include any regulatory filings for cost recovery and continued customer growth updates .
• Monitoring items: property tax trajectory, energy/treatment cost trends, AFUDC levels tied to construction activity, and any updates to wastewater expansion and service line remediation programs .

Values marked with * are retrieved from S&P Global (Capital IQ) consensus estimates.