American States Water NYSE: AWR reported higher first-quarter earnings as all three of its operating segments posted year-over-year gains, supported by rate increases at its regulated utilities and stronger construction activity in its contracted services business.
President and Chief Executive Officer Robert Sprowls said consolidated earnings per share rose to $0.76 for the first quarter of 2026, up from $0.70 in the same period of 2025, an increase of 8.6%. Sprowls said the company “started 2026 with strong financial results” and that its water utility, electric utility and contracted services businesses each contributed to the improvement.
The company also said its regulated utilities remain on pace to invest a combined $185 million to $225 million in infrastructure during 2026, including spending on water, wastewater and electric utility systems.
Segment earnings rise across the business
Golden State Water, the company’s water utility, reported earnings of $0.55 per share, compared with $0.52 per share in the prior-year quarter. The increase was largely attributed to new water rates for 2026, including additional revenue tied to an advice letter capital project approved last year. Those gains were partially offset by higher water supply costs, operating expenses, interest expense net of interest income, other expense and income taxes. The company also noted a $0.01-per-share earnings reduction from the dilutive effect of shares issued under its at-the-market offering program.
The electric segment reported earnings of $0.08 per share, up from $0.07 per share a year earlier. The increase was primarily related to rate increases, partially offset by higher operating and interest expenses.
American States Utility Services, or ASUS, contributed $0.15 per share, compared with $0.13 per share in the first quarter of 2025. The increase was driven largely by higher construction activity and lower interest expense, partially offset by higher operating expenses.
Revenue and cash flow improve
Consolidated revenue increased by $21.2 million from the year-earlier period. Water segment revenue rose $11.1 million, largely due to new 2026 water rates. Electric segment revenue increased $3.7 million, mainly from fourth-year rate increases and additional revenue from approved advice letter projects in 2025. ASUS revenue increased $6.4 million, primarily because of higher construction activity during the quarter due to timing.
Supply costs increased by $5.1 million, mostly reflecting higher overall per-unit purchased water costs included in 2026 water rates, which the company said had no impact on net earnings, as well as higher purchased water volume compared with the prior-year quarter.
Total operating expenses other than supply costs rose $10.2 million from 2025, due to higher ASUS construction expenses tied to increased construction activity and broader increases in operating expenses, some of which were timing-related.
Net cash provided by operating activities was $71.6 million for the first quarter of 2026, compared with $45.1 million a year earlier. The company said the increase was largely tied to new rates at its regulated utilities from approved general rate case proceedings, approved surcharges and additional base rates from advice letter filings. Billing and cash receipts for work at ASUS military bases and the timing of vendor payments also contributed.
American States Water said its regulated utilities invested $42.1 million in company-funded capital projects during the quarter. Under its at-the-market offering program, the company raised $6.2 million in net proceeds during the quarter and had $34.3 million remaining available for issuance. The company said it does not expect to continue the ATM program after the remaining balance is fully used.
Regulatory activity remains a key focus
Sprowls said Golden State Water is preparing its next water general rate case, expected to be filed by July 1. The case will cover 2028 through 2030. He also discussed the California Public Utilities Commission’s January 2025 decision in the prior water general rate case, which required Golden State Water to move from full revenue decoupling and a full supply cost balancing account to a modified rate adjustment mechanism known as the Monterey-style Water Revenue Adjustment Mechanism, or M-WRAM, and an incremental cost balancing account for supply costs.
As a result, Sprowls said the company may face future volatility in revenue and earnings because of changes in customer water consumption and water supply source mix. He said first-quarter earnings were affected by an actual water supply source mix that included more purchased water than in the same period of 2025, due in part to certain wells being temporarily offline in a few service areas.
Golden State Water received CPUC approval in December to implement its full second-year rate increases, effective Jan. 1, 2026. Sprowls said the approval resulted in higher adopted operating revenues, less water supply costs, of approximately $32 million compared with 2025 levels. That increase included nearly $11 million related to advice letter capital projects.
The company also said the CPUC approved a request by Golden State Water and three other large investor-owned California water utilities to defer the cost of capital application by one year, moving the filing date to May 1, 2027, with rates effective Jan. 1, 2028. Golden State Water’s current authorized rate of return on rate base is 7.93%, including a 10.06% return on equity and a capital structure of 57% equity and 43% debt.
Bear Valley and ASUS outlook
Bear Valley Electric implemented new rates in January for 2026, the final year of its current four-year rate cycle. In January, Bear Valley also filed a general rate case application covering 2027 through 2030. The utility requested capital budgets of approximately $133 million for the four-year cycle, plus about $17 million plus allowance for funds used during construction for capital projects to be recovered through advice letter filings when completed.
For ASUS, Sprowls said the business benefited from increased construction activity, higher management fee revenue from the resolution of various economic price adjustments and lower interest expense from reduced borrowing levels and lower average interest rates. The company projected ASUS will contribute $0.63 to $0.67 per share for 2026.
Sprowls also highlighted the company’s dividend record, saying the quarterly dividend rate has grown at a compound annual growth rate of 8.5% over the past five years, exceeding the company’s long-term policy goal of dividend growth above 7%.
The call concluded without any questions from analysts or investors during the question-and-answer session.
About American States Water NYSE: AWR
American States Water Company NYSE: AWR, founded in 1929 and headquartered in San Dimas, California, is a publicly traded utility holding company. The company operates primarily through two regulated segments—water and electric utilities—and provides non-regulated water system services. Over its history, American States Water has expanded its footprint through strategic acquisitions and organic growth, positioning itself as a reliable provider of essential services in its core territories.
Within its regulated water utility segment, American States Water serves more than 250,000 residential, commercial and industrial customers across 35 communities in six counties of California.
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