In a recent earnings call, American States Water Company provided updates on its second quarter 2024 performance and outlined key strategies for the future. The call, led by President and CEO Robert Sprowls and Senior Vice President of Finance and CFO Eva Tang, highlighted the company's recent accomplishments and its focus on infrastructure investment, regulatory settlements, and dividend growth.
Financial Highlights
The company reported consolidated earnings of $0.85 per share for the second quarter, with Golden State Water reporting earnings of $0.67 per share and the Electric segment reporting earnings of $0.01 per share. Despite a decrease in earnings compared to the adjusted results of the second quarter of 2023, the company's adjusted consolidated earnings for the same period were $0.86 per share. This decrease was primarily due to favorable nonrecurring regulatory adjustments from the previous year that did not recur in 2024.
Regulatory Settlements and Infrastructure Investments
A significant achievement during the quarter was the settlement in principle reached by Golden State Water with the Public Advocates Office of the California Public Utilities Commission (CPUC) in connection with the general rate case for water rates from 2025 to 2027. This settlement authorizes Golden State Water to invest approximately $573.1 million in capital infrastructure over the 3-year capital cycle. Additionally, the company successfully commenced management of water and wastewater systems on two military bases, marking a significant expansion in its contracted services segment.
Dividend Growth and Financial Stability
The company also announced an 8.3% increase in the third quarter dividend, demonstrating its commitment to long-term sustainable earnings growth and returning value to shareholders. American States Water has maintained a stable credit rating, with Golden State Water holding an A-plus stable rating with S&P and an A2 stable rating with Moody's investor service.
Regulatory Challenges and Future Outlook
The earnings call also addressed ongoing regulatory challenges, particularly the CPUC's decision to discontinue the use of full decoupling mechanisms. Despite the uncertainty surrounding the reauthorization of fully decoupled rates, the company remains optimistic about the prospects of achieving a favorable outcome. The company is currently awaiting decisions on several rate cases, including the electric general rate case, which is expected to set new rates for 2023 through 2026.
Looking Ahead
In conclusion, American States Water Company's second quarter 2024 results reflect a company focused on investing in infrastructure, navigating regulatory challenges, and delivering value to its shareholders. With a commitment to long-term sustainable growth and a strong dividend track record, American States Water continues to position itself for future success in the utility sector. The company's strategic initiatives and regulatory settlements provide a solid foundation for its ongoing growth and expansion. As American States Water moves forward, it will continue to monitor regulatory developments and capitalize on opportunities for strategic expansion in the utility sector.