American States Water pany(US:AWR)2023-03-02 22:40Financial Data and Key Metrics Changes - Consolidated earnings per share (EPS) for Q4 2022 were $0.50, down from $0.55 in Q4 2021, a decrease of $0.05 per share [9] - Adjusted consolidated diluted earnings for 2022 were $2.59 per share, an increase of $0.12 from $2.47 per share in 2021 [7][15] - Full year EPS for 2022 was $2.11, down from $2.55 in 2021, a decrease of $0.44 per share [15] Business Line Data and Key Metrics Changes - Golden State Water Company reported Q4 earnings of $0.28 per share, down from $0.36 per share in 2021 [10] - The electric segment's earnings increased to $0.08 per share in Q4 2022 from $0.07 per share in Q4 2021 [11] - Contracted services segment earnings increased by $0.04 per share for Q4 2022 compared to the same period last year [11][26] Market Data and Key Metrics Changes - Consolidated revenue for Q4 2022 increased by $8.8 million compared to Q4 2021, primarily due to increased revenues from contracted services [12] - Operating expenses, excluding supply costs, increased by approximately $10.6 million compared to Q4 2021, driven by higher construction costs and administrative expenses [13] Company Strategy and Development Direction - The company invested a record high of $167.4 million in infrastructure at regulated utilities in 2022, with plans for $140 million to $150 million in capital expenditures for 2023 [6][17] - The company aims to maintain a compound annual growth rate of over 7% in dividends over the long term, with an 8.9% increase in annual dividends in 2022 [7][28] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the delayed decision from the California Public Utilities Commission (CPUC) regarding the general rate case, which could have positively impacted earnings [20][21] - The company anticipates that supply chain issues will improve in 2023, projecting earnings contributions from the contracted services segment to be between $0.45 and $0.49 per share [26] Other Important Information - The company received $10 million in COVID-19 relief funds to assist customers with delinquent bills [16] - The company plans to file its next water general rate case in July 2023 for rates effective from 2025 to 2027 [21] Q&A Session Summary Question: Impact of the pending cost of capital proceeding on earnings - Management confirmed that the $0.13 drag on earnings due to the pending cost of capital proceeding is expected to return in 2023 if the decision does not require retroactive adjustments [30][31] Question: Dividend increase and long-term growth potential - Management discussed the 8.9% dividend increase as a reflection of the company's long-term earnings growth potential, with significant rate base growth anticipated [32][34] Question: Future equity needs and rising interest rates - Management indicated that rising interest rates could impact future equity needs, but they aim to maintain their credit rating and assess capital expenditure needs continuously [39][42] Question: Delays in the general rate case decision - Management expressed frustration over the delays in the CPUC's decision-making process, attributing it to potential staffing issues within the commission [49][53]