Sign in

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

AS

AMERICAN STATES WATER CO (AWR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered consolidated diluted EPS of $0.75, up $0.20 year over year, with adjusted EPS of $0.69 excluding a $0.06 retroactive rate impact from the electric GRC; consolidated revenue rose to $143.10M versus $125.18M in Q4 2023 .
  • Water segment EPS rose to $0.52 on rate increases and a $5M tax benefit ($0.13/share) from the water GRC decision; electric segment EPS was $0.13, including $0.06/share from retroactive rates; contracted services EPS dipped to $0.11 on higher OpEx .
  • Regulatory outcomes were constructive: CPUC authorized ~$573.1M water capex for 2025–2027 and ~$75.6M electric capex for 2023–2026, plus advice letter projects and ROE retention (water 10.06% through 2026; electric 10.0%) .
  • 2024 operating cash flow surged to $198.7M, capex reached a record $235.5M, and ASUS won $56.5M in capital upgrades; management highlighted dividend durability with a 70-year streak of annual increases and an 8.8% 5-year CAGR .

What Went Well and What Went Wrong

What Went Well

  • “We finished 2024 with very strong financial results,” supported by constructive CPUC decisions that enable continued infrastructure investment .
  • Water segment EPS +$0.11 YoY on third-year rate increases, higher authorized ROE, and $5M tax benefit from the water GRC decision .
  • ASUS momentum: $56.5M in new capital upgrades (record), two new bases commenced, and projected 2025 contribution of $0.59–$0.63 per share .

What Went Wrong

  • Higher operating expenses and interest costs across segments; Q4 “Other income” decreased by $1.6M on lower retirement plan investment gains versus prior year .
  • Dilution from the ATM equity program reduced 2024 EPS by ~$0.04; Q4 water EPS impact ~($0.01) per share .
  • Electric segment’s underlying adjusted EPS was flat YoY at $0.07 (excluding retroactive $0.06), reflecting wildfire mitigation-related OpEx and interest headwinds .

Financial Results

Consolidated Results vs Prior Year and Prior Quarters

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$125.18 $155.33 $161.78 $143.10
Net Income ($USD Millions)$20.43 $31.86 $35.83 $28.44
Diluted EPS ($USD)$0.55 $0.85 $0.95 $0.75
EBIT Margin % (Operating Income/Revenue)27.86% 33.34% 34.03% 27.03%
Net Income Margin %16.32% 20.52% 22.16% 19.87%

Notes: Margins calculated from reported operating income and total operating revenues in each period .

Segment Operating Revenues

Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
Water$110.42 $124.04 $92.68
Electric$8.70 $9.04 $21.70
Contracted Services$36.20 $28.70 $28.72

Segment EPS Contributions

Segment EPS ($)Q2 2024Q3 2024Q4 2024
Water$0.67 $0.84 $0.52
Electric$0.01 $0.02 $0.13
Contracted Services$0.19 $0.11 $0.11
AWR (Parent)($0.02) ($0.02) ($0.02)
Consolidated EPS$0.85 $0.95 $0.75

Reported vs Adjusted EPS (Non-GAAP)

MetricQ4 2023Q4 2024
Consolidated Diluted EPS (GAAP)$0.55 $0.75
Adjustment: Electric retroactive rates—($0.06)
Consolidated Diluted EPS (Adjusted)$0.55 $0.69
Electric Diluted EPS (Adjusted)$0.07 $0.07

KPIs

KPIQ2 2024Q3 2024 (YTD)FY/Q4 2024
Operating Cash Flow ($USD Millions)$70.5 $134.2 $198.7
Company-Funded Capex ($USD Millions)$105.1 $172.5 $235.5
Weighted Avg Diluted Shares (000s)37,418 37,683 38,076
Dividend per Share ($)$0.4300 $0.4655 $0.4655 (declared Q1’25)
ATM Equity Raised ($USD Millions)$32.0 (H1) $59.3 (YTD 9/30) $88.7 (FY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
ASUS EPS contributionFY 2024 → FY 2025$0.54–$0.57 (FY 2024) $0.59–$0.63 (FY 2025) Raised
Regulated capex (company-funded)FY 2024 → FY 2025$210–$230M (FY 2024) $170–$210M (FY 2025) Lower band/normalized post record year
Water operating revenues less supply costs2025 vs 2024N/A+$23M in 2025; +$20M in 2026/2027 (inflation-based; excl. advice letters) New upward trajectory
Electric adopted operating revenues (ex supply)2025/2026N/A+$2.2M (2025); +$3.3M (2026) New upward trajectory
Dividend policyOngoing>7% long-term CAGR target Reaffirmed; Q1’25 dividend $0.4655 declared Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Regulatory outcomes (CPUC)Water GRC settlement in principle; targeting decision by YE’24 Electric GRC settlement filed; expected retroactive rates; water decision anticipated Final decisions received for both water and electric; constructive outcomes enabling capex Positive resolution; de-risked
Decoupling mechanismsUncertainty post court ruling; watching Cal American case Expect decision timing delays; first-year rate increases likely significant Water decision implemented modified sales mechanism; full decoupling rejected; ROE retention through 2026 Clarified framework; partial mechanisms
Electric wildfire mitigation recoverySought recovery of prior costs; delays impacting EPS Retroactive adjustments estimated $0.05–$0.07 for 2023–2024 upon decision Retroactive rates booked; majority of $0.06 EPS benefit relates to 2024 Benefit realized; ongoing OpEx pressures
ASUS growthNew bases (Pax River, JBCC) commenced; 2024 guidance $0.50–$0.54 2024 raised to $0.54–$0.57; $54M new awards $56.5M awards; 2025 $0.59–$0.63 guidance Strengthening; multi-year backlog
Financing and dilutionATM proceeds ~$32M in H1 ATM continues; proceeds ~$59.3M YTD ~$88.7M FY; 2025 planned ~$60M issuance Continued equity funding; manageable

Management Commentary

  • “We are very pleased to have received final decisions… Both decisions represent constructive regulatory outcomes that enable us to continue investing in our water and electric infrastructure” — CEO Robert Sprowls .
  • “Recorded consolidated earnings were $0.75 per share… water $0.52, electric $0.13… revenues up $17.9M; electric GRC retroactive rates drove $10.6M revenue increase” — CFO Eva Tang .
  • “Golden State Water… authorized to invest $573.1 million in capital infrastructure… adopted ROE of 10.06% retained through 2026” — CEO Robert Sprowls .
  • “Bear Valley Electric… allows $75.6 million in capital infrastructure… adopted ROE of 10.0%” — CEO Robert Sprowls .
  • “ASUS has received a significant increase in new capital upgrade awards in 2024 of $56.5 million… we project ASUS to contribute $0.59 to $0.63 per share this year [2025]” — CEO Robert Sprowls .

Q&A Highlights

  • Electric retroactive EPS split: Management indicated the majority of the $0.06 Q4 EPS benefit relates to 2024 rather than 2023 .
  • Operating cash flow trajectory: Nearly $200M in 2024 OCf viewed as a reasonable proxy for 2025, given continued surcharge collections and retroactive recoveries .
  • ATM equity program: Plan to issue roughly $60M in 2025, balanced over two years, with flexibility if needed .
  • Wildfire mitigation cost recovery: Discussion of substantial unrecovered CapEx (~$24M) and O&M for recovery in the current electric rate cycle; settlement moves certain projects into advice letter treatment .

Estimates Context

  • Wall Street consensus estimates (S&P Global/Capital IQ) for Q4 2024 EPS and revenue were not retrievable due to API request limitations at the time of analysis; therefore, we cannot provide an actual-vs-consensus comparison at this time. This will need follow-up once access is restored.
  • Given constructive regulatory outcomes and reported Q4/2024 results, we anticipate upward adjustments to 2025 ASUS contribution estimates ($0.59–$0.63) and multi-year regulated revenue trajectories; however, formal consensus revisions should be confirmed via S&P Global data once available .

Key Takeaways for Investors

  • Q4 quality: Strong reported EPS ($0.75) and revenue ($143.10M) with clear drivers (water rate increases, $5M tax benefit, electric retroactive rates), but underlying electric profitability still pressured by wildfire mitigation OpEx and higher interest costs .
  • Regulatory de-risking: Final CPUC decisions for water and electric materially improve visibility into rate base growth and revenue trajectories through 2026/2027, supporting medium-term earnings compounding and dividend growth .
  • Cash and capex execution: 2024 OCf ($198.7M) and record capex ($235.5M) confirm strong internal funding and project delivery capacity; 2025 capex normalizes to $170–$210M, reducing near-term funding intensity .
  • ASUS as a growth vector: $56.5M new capital awards and full-year 2025 contribution guidance ($0.59–$0.63) enhance diversified earnings and backlog stability; monitor execution and margin mix as new projects ramp .
  • Equity funding manageable: $88.7M raised in 2024 under ATM; ~ $60M targeted for 2025. Dilution impact ($0.04 EPS in 2024) remains modest relative to regulated growth and ASUS contribution .
  • Dividend durability: Reaffirmed long-term >7% CAGR policy, Q1’25 dividend declared at $0.4655; rate base growth and regulatory clarity underpin income thesis .
  • Near-term catalysts: Advice letter filings and recovery of retroactive amounts at BVES; potential continued strength in OCf; watch for any CPUC implementation nuances impacting sales mechanisms and supply cost balancing .