American States Water (AWR) Earnings Transcript

Core Insights - American States Water Company reported a consolidated earnings per share (EPS) of $0.87 for Q2 2025, an increase of $0.02 compared to Q2 2024 [2][26] - The company announced an 8.3% increase in the annualized dividend rate, marking 71 consecutive years of annual increases [4][10] Financial Performance - Water segment earnings per share for Golden State Water were $0.73 in Q2 2025, up $0.06 from Q2 2024, driven by new water rates and higher gains on retirement plan investments [3][26] - Electric segment earnings per share increased to $0.03 in Q2 2025, a $0.02 increase compared to Q2 2024 due to new rate approvals [3][27] - Consolidated revenues increased by $7.7 million in Q2 2025 compared to Q2 2024, with water revenues rising by $9.3 million and electric revenues increasing by $4.2 million [5][29] Capital Investments and Liquidity - The company expects capital infrastructure investments between $170 million and $210 million for the year [6][24] - Operating cash flow for the first six months of 2025 was $109.6 million, a $39.1 million increase over the same period in 2024 [7][32] - The borrowing capacity was expanded from $165 million to $195 million, with maturity extended to June 2029 [6][34] Regulatory Developments - The California Public Utilities Commission (CPUC) approved new water and electric rates for 2025 to 2027 and 2023 to 2026, respectively [20][35] - A modified rate adjustment mechanism (MRAM) was adopted, replacing the full decoupling mechanism, which may introduce future revenue volatility [36][37] - Senate Bill 473, if passed, could restore mandatory revenue decoupling for California water utilities [11][39] Growth and Future Outlook - Golden State Water's rate base grew from $752.2 million in 2018 to $1.3575 billion in 2024, representing a 10.3% compound annual growth rate [8][43] - The company completed the acquisition of water and wastewater system assets for a new community, expected to have approximately 1,300 customer connections [10][42] - ASUS is projected to contribute $0.59 to $0.63 per share in 2025, with expectations of recovery in the second half of the year as construction activity normalizes [9][47]