American States Water Q3 Earnings Beat Estimates, Revenues Up Y/Y

Core Insights - American States Water Company (AWR) reported third-quarter 2025 operating earnings per share (EPS) of $1.06, exceeding the Zacks Consensus Estimate of $1.01 by 4.95%, and up from 95 cents in the same quarter last year [1][10] AWR's Total Revenues - Total operating revenues reached $182.72 million, surpassing the Zacks Consensus Estimate of $178 million by 2.65%, and reflecting a 12.9% increase from $161.78 million in the prior-year period [2][10] Highlights of AWR's Q3 Release - Operating expenses totaled $121 million, a 13.4% increase from $106.7 million in the year-ago quarter, driven by higher costs in water purchases, power purchases for resale, administrative expenses, maintenance, and ASUS construction [3] - Operating income was $61.7 million, up 11.9% from $55.1 million in the corresponding period of 2024 [3][10] Interest Expenses and Income - Interest expenses amounted to $11.7 million, down 13.4% year over year due to decreased average borrowing levels and interest rates, despite a decline in interest income from regulatory assets [4] - Interest income totaled $1.1 million compared to $1.7 million in the year-ago quarter [4] Regulatory Approvals and Growth - AWR's regulated water utility received CPUC approval to provide water services to a new planned community, expected to serve up to 3,800 customer connections over the next five years, with potential for 17,500 total dwelling units at full buildout over 20+ years [5] Segmental Details - Earnings from the Water segment were 86 cents per share, up 2.38% from 84 cents a year ago, attributed to new CPUC-authorized rate increases effective January 1, 2025 [6] - EPS from the Electric segment was 4 cents, an increase of 2 cents from the previous year, driven by higher revenues from new rates implemented in 2025 [7] - EPS from the Contracted Services segment was 19 cents, up 8 cents from the year-ago quarter [7] Financial Update - As of September 30, 2025, cash and cash equivalents totaled $26.1 million, down from $26.7 million as of December 31, 2024 [11] - Long-term debt amounted to $790.3 million compared to $640.4 million as of December 31, 2024 [11] - Cash provided by operating activities in the first nine months of 2025 totaled $202.1 million, up from $134.2 million in the year-ago period [11] Guidance - AWR's regulated utilities are authorized to spend nearly $650 million in capital investments, targeting to invest $180 to $210 million in 2025 [12] - The contracted services business is expected to contribute 59 cents to 63 cents per share for the whole year [12] Zacks Rank - American States Water currently holds a Zacks Rank 2 (Buy) [13]