American States Water NYSE: AWR reported second-quarter 2026 earnings of $1.09 per share, up from $0.87 per share a year earlier, as its water, electric and contracted services businesses each posted year-over-year gains.
President and Chief Executive Officer Bob Sprowls said the results reflected “strong execution across our business” and cited new customer rates at the regulated utilities as well as higher construction activity at the company’s contracted services segment. The company also announced an 8.2% increase in its quarterly dividend, bringing its annualized dividend rate to $2.182 per share.
Water segment leads earnings growth
Golden State Water, the company’s water utility, generated second-quarter earnings of $0.91 per share, compared with $0.73 per share in the prior-year period. Chief Financial Officer Eva Tang said the $0.18-per-share increase was driven largely by water rates implemented for 2026, including revenue from capital projects approved through advice letters in late 2025.
Other contributors included higher gains on investments supporting a retirement plan. These benefits were partly offset by higher water supply costs, interest expense net of interest income, and a higher effective income tax rate. Tang also said share issuances under the parent company’s at-the-market equity offering program reduced earnings by $0.02 per share.
Water segment revenue increased by $11.4 million from the second quarter of 2025, while electric segment revenue rose by $700,000. The gains were largely tied to new 2026 rates and revenue associated with approved advice letter projects.
Sprowls said Golden State Water benefited during the quarter from a 4% increase in customer water consumption and a more favorable supply mix, including less reliance on purchased water. Certain wells that had been temporarily offline during the first quarter returned to service during the second quarter.
However, he cautioned that those favorable trends may not persist for the rest of 2026. Golden State Water’s current regulatory framework includes a modified revenue decoupling mechanism and an incremental water supply cost balancing account, which Sprowls said expose earnings to volatility from consumption changes and shifts in water supply mix.
“It remains uncertain whether these favorable conditions in the second quarter will continue through the remainder of 2026 or if their positive earnings impact will reverse,” Sprowls said. He noted that weather, conservation, precipitation patterns, groundwater quality and pumping conditions can affect consumption and supply costs.
Rate cases and capital investment plans
Golden State Water received approval in December to implement its full second-year rate increases effective Jan. 1, 2026. The approval increased adopted operating revenue less water supply costs by $32 million for 2026 compared with 2025, including nearly $11 million related to advice letter capital projects.
On July 1, Golden State Water filed a general rate case application covering 2028 through 2030. The utility requested capital budgets of approximately $1 billion for the three-year period and asked the California Public Utilities Commission to reinstate full revenue decoupling and a full water supply cost balancing account. A decision is scheduled for the fourth quarter of 2027.
The company’s current authorized return on rate base is 7.93%, based on a 10.06% return on equity and a capital structure of 57% equity and 43% debt. That authorization will remain in effect through Dec. 31, 2027, following the CPUC’s approval to delay the next water cost-of-capital filing until May 2027.
Golden State Water and the CPUC’s Public Advocates Office also filed a joint settlement in July seeking approval to acquire an existing water system in Norwalk, California, serving nearly 900 customer connections. If approved, the system would be added to an existing rate-making area. A proposed decision is expected in the fourth quarter.
The company expects its regulated utilities to invest $185 million to $220 million in infrastructure during 2026. Tang said company-funded capital expenditures are expected to total between $185 million and $200 million for the year, after $91.7 million was invested during the first half.
Electric and contracted services results
Bear Valley Electric earned $0.04 per share in the second quarter, compared with $0.03 per share a year earlier. Tang attributed the increase primarily to rate increases, partly offset by higher operating and interest expenses.
Bear Valley Electric implemented new 2026 rates in January, the final year of its current four-year rate cycle. The utility filed a new general rate case in January for rates covering 2027 through 2030, requesting approximately $133 million in capital budgets during the period and roughly $17 million plus allowance for funds used during construction for additional projects to be recovered through advice letters.
American States Utility Services, or ASUS, contributed $0.16 per share, up from $0.13 per share in the second quarter of 2025. The increase reflected higher construction activity, increased management fee revenue tied to the resolution of economic price adjustments, and lower interest expense. ASUS expects to contribute between $0.63 and $0.67 per share for full-year 2026.
Liquidity, equity offering and dividend increase
Net cash provided by operating activities totaled $116.6 million in the first half of 2026, compared with $109.6 million in the prior-year period. Tang said the increase resulted from new utility rates, approved surcharges, advice letter project revenue and PFAS litigation proceeds received during the year.
The company completed its at-the-market equity offering program in June, raising the program’s maximum aggregate capacity of $200 million in gross proceeds since it was established in February 2024. During the first half, the company raised $39.9 million net of issuance and legal costs. Sprowls said American States Water does not plan to issue additional equity through at least the end of 2029 to support current operations.
Standard & Poor’s affirmed the company’s A credit rating and Golden State Water’s A+ rating, both with stable outlooks.
The company’s dividend increase marks its 72nd consecutive year of raising dividends paid to shareholders. American States Water has paid dividends every year since 1931, according to Sprowls.
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.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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