Sign in

You're signed outSign in or to get full access.

AS

AMERICAN STATES WATER CO (AWR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid year-over-year growth: diluted EPS of $0.70 (+13% y/y) on operating revenues of $148.0M (+9% y/y), driven primarily by CPUC-approved rate increases at the water and electric utilities .
  • EPS and revenue were modest beats versus Wall Street consensus: EPS $0.70 vs $0.67*, revenue $148.0M vs $145.8M*; drivers included favorable water supply mix (more pumped vs purchased water) and new rates, partially offset by retirement-plan investment losses (-$0.05 per share) and ATM dilution (-$0.02 per share) .
  • Regulatory catalysts remain supportive: CPUC decisions authorized nearly $650M of capital investments across water ($573.1M) and electric ($75.6M) rate cycles; management expects regulated utility capex of $170–$210M in 2025 .
  • Contracted services (ASUS) maintained EPS at $0.13 and reiterated full-year contribution of $0.59–$0.63 per share; weather delayed construction in Q1 but expected catch-up later in 2025 .
  • Financing and liquidity actions: ~$25.8M raised via ATM in Q1, credit facilities extended to June 2029 and expanded to $195M; management indicated ~$60M equity issuance target for 2025, within a $200M multi-year program .

Note: Values marked with * are from S&P Global consensus estimates.

What Went Well and What Went Wrong

What Went Well

  • New rates drove segment EPS gains: Water +$0.04 (to $0.52), Electric +$0.02 (to $0.07), reflecting CPUC final decisions effective 2025 for water and retroactive 2023–2026 for electric .
  • Favorable water supply mix supported earnings under new ICBA: pumped sources (lower cost) met more demand than assumed, partially offsetting higher per-unit supply costs and consumption .
  • Strategic capital authorization and rate base trajectory: CPUC approved $573.1M water and $75.6M electric capital programs; management highlighted robust rate base growth outlook and advice-letter revenue mechanisms .

Selected quote: “We started 2025 with strong financial results… Favorable variance is attributable to the receipt of final decisions from the CPUC… which authorized new water rates for 2025 to 2027 and authorized new electric rates for 2023 to 2026.”

What Went Wrong

  • Investment losses and dilution weighed on EPS: retirement-plan investments generated a $0.05 per-share unfavorable variance year-over-year; ATM program diluted EPS by ~$0.02 .
  • Higher operating costs (ex-supply): labor, regulatory, maintenance, insurance, D&A, and property taxes increased; electric also saw higher wildfire mitigation costs now expensed into rates .
  • ASUS construction activity slowed due to weather, offsetting fee increases; management expects catch-up over the year .

Financial Results

Consolidated Results vs Prior Periods and Consensus

MetricQ1 2024 (oldest)Q4 2024Q1 2025 (newest)
Total Operating Revenues ($USD)$135.251M $143.098M $148.013M
Operating Income ($USD)$38.974M $38.693M $45.546M
Operating Margin (%)28.8% (calc. from above) 27.0% (calc.) 30.8% (calc.)
Net Income ($USD)$23.135M $28.435M $26.844M
Diluted EPS ($)$0.62 $0.75 $0.70
EPS Consensus Mean ($)*$0.62*$0.63*$0.67*
Revenue Consensus Mean ($USD)*$119.0M*$160.168M*$145.848M*
  • EPS beat: Q1 2025 actual $0.70 vs $0.67* (+$0.03); revenue beat: $148.0M vs $145.8M* (+$2.2M). Drivers: rate increases (water/electric), favorable supply mix; offsets: investment losses and ATM dilution .
  • Q/Q: EPS down vs Q4 2024 ($0.75) as prior quarter included electric retroactive rate impacts; y/y growth solid on new rates .

Note: * Values retrieved from S&P Global.

Segment EPS Contribution (Non-GAAP presentation used by company)

Segment EPSQ1 2024 (oldest)Q1 2025 (newest)Change
Water$0.48 $0.52 +$0.04
Electric$0.05 $0.07 +$0.02
Contracted Services (ASUS)$0.13 $0.13 $0.00
AWR (Parent)$(0.03) $(0.02) +$0.01
Consolidated (GAAP)$0.62 $0.70 +$0.08

Note: Company’s segment EPS is a non-GAAP measure; reconciliations provided in the release .

Segment Operating Revenues

Operating Revenues ($USD)Q1 2024 (oldest)Q1 2025 (newest)Change
Water$90.265M $102.003M +$11.738M
Electric$12.205M $15.002M +$2.797M
Contracted Services$32.781M $31.008M -$1.773M (weather-related construction delays)

KPIs

KPIQ1 2024Q1 2025
Cash from Operations ($USD)$45.8M $45.1M
Company-funded Capex ($USD)n/a$45.5M (quarter); 2025 plan $170–$210M
Weighted Avg Diluted Shares37,107 38,354
Dividend per Share$0.4300 $0.4655 (Q2 declared May 5, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ASUS EPS ContributionFY 2025n/a$0.59–$0.63 per share Initiated/affirmed
Regulated Utility CapexFY 2025n/a$170–$210M Initiated
Dividend PolicyLong-term>7% CAGR target >7% CAGR target maintained Maintained
Common DividendQ2 2025n/a$0.4655/sh, payable June 3 to holders of record May 19 Announced
Financing (ATM)2025n/a~$60M target; $200M program over cycle; $25.8M raised in Q1 Plan disclosed
Credit FacilitiesThrough 2029$165M capacity, Jun-2028 maturity [implied prior]Extended to Jun-2029; capacity expanded to $195M Raised/extended

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Water GRC and Rate Design (M-WRAM/ICBA)Q3 2024: rate increases, cost of capital mechanism triggered ; Q4 2024: water decision delivered Q4 tax benefit CPUC ordered transition to M-WRAM and ICBA effective Jan 1, 2025; fixed service charges at 45–48% of revenue requirement Structural shift; consumption/supply mix introduces earnings volatility
Electric GRC and Wildfire CostsQ3 2024: settlement pending, retroactive rates anticipated ; Q4 2024: final decision Jan 16, 2025; retroactive amounts recognized New rates increased revenues; wildfire mitigation expenses now recovered, boosting opex; additional advice-letter projects Revenue support with higher opex; advice-letter recovery pipeline
ASUS ActivityQ3 2024: $54M awarded, FY24 contrib. $0.54–$0.57 Q1 2025: contrib. $0.13; FY25 guide $0.59–$0.63; construction delayed by weather, expected catch-up Stable earnings; backlog supports 2025
Capital Program & Rate BaseQ3/Q4 2024: strong capex expectations and rate base growth Water: $573.1M authorized; Electric: $75.6M; plan $170–$210M 2025 capex Sustained investment driving rate base growth
Financing/LiquidityQ4 2024: higher borrowings; ATM ongoing ATM $25.8M in Q1; facilities extended and expanded Fortified liquidity to fund capex

Management Commentary

  • CEO framing: “We started 2025 with strong financial results… authorized new water rates for 2025 to 2027 and authorized new electric rates for 2023 to 2026.”
  • CFO on supply mix: “Our pumped water sources, which cost less than purchased water, were capable of meeting a greater portion of customer demand… favorable supply mix during the first quarter may or may not continue.”
  • CEO on rate design and volatility: “Without the continuation of a full revenue decoupling mechanism and a full cost balancing account… the company may be subject to future volatility.”
  • Dividend stance: “Our quarterly dividend rate has grown at a CAGR of 8.8% over the last 5 years… policy goal of >7% CAGR over the long term.”
  • ASUS pipeline: “We probably won’t see a 50-year privatization award this year… nontraditional vehicles like 15-year contracts could progress; Navy most active; Army/AF reassessing.”

Q&A Highlights

  • Equity financing cadence: ~$60M ATM issuance targeted in 2025; ~$83–$85M remaining over the next two years within the $200M program .
  • Military privatization outlook: No near-term 50-year awards expected; potential Army RFPs later in 2025; Navy enthusiastic; nontraditional 15-year contracts under pursuit; uncertainty under new administration acknowledged .
  • Regulatory workload: Management expects lighter regulatory year after securing two favorable decisions; focus on execution and settlements .

Estimates Context

  • Q1 2025 EPS: actual $0.70 vs consensus $0.673*; revenue: actual $148.013M vs consensus $145.848M*.
  • Q4 2024 EPS: actual $0.75 vs consensus $0.633*; revenue: actual $143.098M vs consensus $160.168M* (miss on revenue due to timing of retroactive rate recognition and segment mix) .
  • Q1 2024 EPS: actual $0.62 vs consensus $0.618*; revenue: actual $135.251M vs $119.0M* (revenue upside) .

Note: * Values retrieved from S&P Global.

Implications: Analysts may modestly raise 2025 water/electric segment run-rate to reflect new rates and Q1 favorable supply mix, but caution on consumption/supply mix volatility under M-WRAM/ICBA; ASUS full-year guidance reaffirmed .

Key Takeaways for Investors

  • Q1 beat on both EPS and revenue, driven by new rates and favorable supply mix; watch for volatility in consumption and source mix under M-WRAM/ICBA, especially into peak season .
  • Regulatory backdrop supportive: $573.1M water and $75.6M electric capital authorizations underpin multi-year rate base growth and earnings visibility .
  • Electric segment now expensing wildfire mitigation within rates; expect opex to remain elevated but supported by adopted revenues and advice-letter recovery .
  • ASUS steady with reaffirmed FY25 EPS contribution ($0.59–$0.63); construction catch-up anticipated after Q1 weather delays .
  • Liquidity strengthened: extended/expanded credit facilities and disciplined ATM program (~$60M planned in 2025) to fund capex while managing dilution .
  • Dividend remains a core pillar with >7% long-term CAGR target; latest quarterly dividend at $0.4655/sh .
  • Near-term trading: Positive regulatory momentum and Q1 beat support sentiment; monitor consumption trends, supply mix normalization, and pace of advice-letter revenue realization as potential intra-quarter catalysts .