California Water Service Group (NYSE:CWT) Posts Quarterly Earnings Results, Misses Estimates By $0.18 EPS

Key Points

• California Water Service reported Q1 EPS of $0.07, missing consensus by $0.18 and seeing net income fall to $4M from $13.3M, driven by lower consumption, higher depreciation and interest, and a higher effective tax rate that cut EPS by about $0.32—shares traded down sharply on the result.
• The CPUC's revised decision provides clearer multi‑year revenue visibility (about $90.5M in 2026 plus increases in 2027–2028) and preserves key mechanisms, while management has accelerated capex (Q1 capex up 17.6% to $129.5M) and is guiding roughly $627M for 2026 to support >11% rate‑base growth if approved.
• The board raised the quarterly dividend ~8% to $0.335 (annualized yield ~3.2%), and the company is pursuing the ~$218M Nexus acquisition that would add about 100,000 connections, subject to regulatory approvals.

California Water Service Group (NYSE:CWT - Get Free Report) issued its quarterly earnings data on Thursday. The utilities provider reported $0.07 earnings per share for the quarter, missing analysts' consensus estimates of $0.25 by ($0.18), FiscalAI reports. The firm had revenue of $214.57 million during the quarter, compared to analyst estimates of $210.27 million. California Water Service Group had a return on equity of 7.67% and a net margin of 12.82%.The company's revenue was up 5.2% on a year-over-year basis. During the same quarter last year, the company posted $0.22 EPS.

Here are the key takeaways from California Water Service Group's conference call:

• The Revised Proposed Decision for the 2024 California GRC is on the commission docket and is described as constructive, providing clear revenue growth visibility of approximately $91M (2026), $43M (2027), and $49M (2028) and preserving key mechanisms (RAM and cost balancing accounts).
• Capital investment accelerated — Q1 capex rose 17.6% to $129.5M and management plans $627M for 2026, which would support a >11% compounded annual rate base growth if approved.
• Reported Q1 net income declined to $4M ( $0.07 EPS) from $13.3M ($0.22 EPS) a year ago, driven by lower consumption, higher depreciation and interest from new capital, and a higher effective tax rate that reduced EPS by about $0.32.
• M&A progress continues — change-in-control filings are filed for the Nexus Nevada/Oregon deal and the BVRT minority buyout in Texas, which would add roughly 100,000 connections outside California (≈20% of total) and expand wastewater/recycled water operations.
• PFAS efforts are advancing with ongoing treatment work and legal recoveries (~$66.5M gross, ~$50M net recovered so far covering ~20–25% of estimated PFAS costs), but additional regulatory risks (e.g., potential microplastics rules) could require further capital.

California Water Service Group Price Performance

CWT traded down $3.11 during trading on Thursday, reaching $42.27. The company's stock had a trading volume of 1,155,760 shares, compared to its average volume of 562,404. The company has a market cap of $2.53 billion, a price-to-earnings ratio of 19.66, a PEG ratio of 1.67 and a beta of 0.61. The firm has a fifty day simple moving average of $45.42 and a two-hundred day simple moving average of $45.27. California Water Service Group has a 1 year low of $41.29 and a 1 year high of $51.15. The company has a quick ratio of 0.80, a current ratio of 0.85 and a debt-to-equity ratio of 0.87.

California Water Service Group Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, May 22nd. Shareholders of record on Monday, May 11th will be paid a $0.335 dividend. This represents a $1.34 dividend on an annualized basis and a yield of 3.2%. The ex-dividend date of this dividend is Monday, May 11th. California Water Service Group's dividend payout ratio (DPR) is 62.33%.

Key Headlines Impacting California Water Service Group

Here are the key news stories impacting California Water Service Group this week:

• Positive Sentiment: CPUC issued a final decision for Cal Water’s 2024 General Rate Case that allows revenue/rate adjustments and supports infrastructure investment through 2027–2028, improving visibility on regulated earnings and funding for capital projects. GlobeNewswire — CPUC Issues Decision
• Positive Sentiment: The revised proposed decision (now finalized) authorizes about $90.5M of additional revenue in 2026 (and multi‑year increases in 2027–2028), plus mechanisms to stabilize revenue versus usage volatility — a material tailwind for regulated cash flow if amounts are collected as expected. GlobeNewswire — Q1 Results & GRC Update
• Positive Sentiment: Board raised the annual dividend ~8% (quarterly $0.3350), extending a long dividend track record — supportive for income investors and signals board confidence in cash flow. GlobeNewswire — Dividend Announcement
• Positive Sentiment: Agreement to acquire Nexus Water Group systems in Nevada and Oregon (~$218M) expands customer base and rate base, supporting medium‑term growth and geographic diversification. Regulatory approvals still required. Quiver — Q1 Results & Nexus Acquisition
• Neutral Sentiment: Company is increasing infrastructure spending (Q1 capex $129.4M; guidance up to ~$627M for 2026) to support system upgrades — good for long‑term rate base but raises near‑term cash needs and working capital requirements. GlobeNewswire — Capex Disclosure
• Negative Sentiment: Q1 EPS missed estimates ($0.07 vs. ~$0.25 consensus); net income fell to $4.0M from $13.3M year‑over‑year — a clear near‑term earnings disappointment that likely drove selling pressure. MarketBeat — Earnings Report
• Negative Sentiment: Operating costs rose materially (water production costs, depreciation and interest expense up), and short‑term borrowings increased — these cost and financing pressures compress margins until rate relief is fully recognized. GlobeNewswire — Financial Details
• Negative Sentiment: Some investor and insider selling noted in recent filings/coverage, and the acquisition/integration and regulatory approval risks mean execution and timing uncertainty remain. Quiver — Insider & Institutional Activity

Insider Buying and Selling

In related news, VP Michael B. Luu sold 740 shares of the stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $44.53, for a total value of $32,952.20. Following the completion of the sale, the vice president owned 23,655 shares of the company's stock, valued at approximately $1,053,357.15. This trade represents a 3.03% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, VP Michael S. Mares, Jr. sold 3,892 shares of California Water Service Group stock in a transaction that occurred on Friday, March 20th. The stock was sold at an average price of $44.00, for a total value of $171,248.00. Following the transaction, the vice president owned 8,525 shares in the company, valued at approximately $375,100. The trade was a 31.34% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.78% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the stock. California State Teachers Retirement System boosted its position in shares of California Water Service Group by 0.5% during the 2nd quarter. California State Teachers Retirement System now owns 54,416 shares of the utilities provider's stock valued at $2,475,000 after acquiring an additional 278 shares during the last quarter. EverSource Wealth Advisors LLC increased its position in California Water Service Group by 109.9% during the second quarter. EverSource Wealth Advisors LLC now owns 697 shares of the utilities provider's stock worth $32,000 after purchasing an additional 365 shares during the last quarter. Martingale Asset Management L P raised its stake in California Water Service Group by 0.6% during the third quarter. Martingale Asset Management L P now owns 82,597 shares of the utilities provider's stock worth $3,790,000 after purchasing an additional 519 shares during the period. Commonwealth Equity Services LLC raised its stake in California Water Service Group by 4.3% during the fourth quarter. Commonwealth Equity Services LLC now owns 13,729 shares of the utilities provider's stock worth $595,000 after purchasing an additional 568 shares during the period. Finally, Danske Bank A S acquired a new position in California Water Service Group in the 3rd quarter valued at about $28,000. Hedge funds and other institutional investors own 82.78% of the company's stock.

Wall Street Analyst Weigh In

Separately, Weiss Ratings downgraded California Water Service Group from a "hold (c)" rating to a "hold (c-)" rating in a research note on Friday, April 24th. One research analyst has rated the stock with a Buy rating and one has assigned a Hold rating to the company's stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $55.00.

About California Water Service Group

California Water Service Group NYSE: CWT is a publicly traded holding company that provides regulated water utility services through its subsidiaries. The company delivers safe, reliable drinking water and wastewater management to residential, commercial, industrial and municipal customers across California, Hawaii and New Mexico. Its principal operating units include California Water Service, New Mexico Water Service and Hawaii Water Service, each responsible for end‐to‐end water supply operations—from source development and treatment to distribution and customer service.

Founded in 1926 as the California Water Service Company, the group has grown to become one of the largest investor‐owned water utilities in the United States by customer count.

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