California Water Service Group (NYSE:CWT) Issues Earnings Results

Key Points

• Third-quarter revenue rose 6.7% year over year to $332.2 million, matching estimates, while EPS increased to $1.05 from $1.03 but missed the $1.16 consensus by $0.11.
• Record year-to-date capital expenditures of $425 million are intended to support nearly 12% annual rate-base growth through 2028, while planned Nexus Water acquisitions in Oregon and Nevada remain on track to close before year-end.
• The company declared a quarterly dividend of $0.335 per share, or $1.34 annualized, representing an approximately 2.9% yield; shares declined to $46.84 following the earnings release.

California Water Service Group (NYSE:CWT - Get Free Report) issued its quarterly earnings data on Thursday. The utilities provider reported $1.05 earnings per share for the quarter, missing analysts' consensus estimates of $1.16 by ($0.11), reports. California Water Service Group had a net margin of 12.63% and a return on equity of 7.74%. The firm had revenue of $332.17 million during the quarter, compared to analyst estimates of $332.17 million. During the same period in the previous year, the firm posted $1.03 earnings per share. The company's quarterly revenue was up 6.7% compared to the same quarter last year.

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

• Third-quarter results improved: Net income rose to $65.4 million, or $1.05 per diluted share, while revenue increased 6.7% to $332.2 million, primarily due to rate changes, new customers and memorandum-account revenue.
• Strong capital investment supports future growth. Year-to-date capital expenditures reached a record $425 million, positioning the company to capture a potentially significant portion of California’s $49 million 2027 step-rate increase and supporting projected rate-base growth of nearly 12% annually through 2028.
• The Nexus Water acquisitions in Oregon and Nevada remain on schedule to close before year-end, with regulatory approvals secured and financing in place. Management expects the acquired operations to be accretive after approximately $7 million to $9 million of one-time integration costs.
• Financing and shareholder returns remain supported: The company secured $125 million of Group debt, $150 million of Cal Water mortgage bonds and $77.8 million through equity forwards, while maintaining its authorized 10.27% return on equity through 2027 and raising its expected 2026 dividend 8.1% to $1.34 per share.
• Management highlighted rising costs, including fuel up 20%–30% year over year, higher wholesale water expenses and continued conservation spending. It expects inflation to remain a pressure, although the company said it has managed expenses within budget and is accelerating capital work ahead of potentially disruptive El Niño-related weather.

California Water Service Group Stock Performance

NYSE CWT traded down $0.32 on Thursday, hitting $46.84. 184,606 shares of the company's stock were exchanged, compared to its average volume of 475,496. The firm has a market cap of $2.90 billion, a price-to-earnings ratio of 21.09, a P/E/G ratio of 1.70 and a beta of 0.48. The firm's 50-day moving average price is $47.65 and its two-hundred day moving average price is $46.62. California Water Service Group has a fifty-two week low of $41.29 and a fifty-two week high of $53.82. The company has a debt-to-equity ratio of 0.81, a current ratio of 0.70 and a quick ratio of 0.67.

California Water Service Group Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Friday, November 20th. Investors of record on Monday, November 9th will be given a $0.3350 dividend. The ex-dividend date is Monday, November 9th. This represents a $1.34 dividend on an annualized basis and a yield of 2.9%. California Water Service Group's dividend payout ratio (DPR) is presently 60.36%.

Analyst Ratings Changes

CWT has been the topic of a number of recent analyst reports. Seaport Research Partners reissued a "buy" rating and issued a $53.00 price objective on shares of California Water Service Group in a research report on Wednesday, August 12th. Weiss Ratings upgraded California Water Service Group from a "hold (c)" rating to a "hold (c+)" rating in a research note on Tuesday, August 4th. Freedom Broker assumed coverage on shares of California Water Service Group in a research report on Wednesday, September 23rd. They issued a "hold" rating and a $49.00 price target for the company. Finally, Wall Street Zen raised California Water Service Group from a "sell" rating to a "hold" rating in a report on Saturday, July 18th. Two research analysts have rated the stock with a Hold rating. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $51.50.

Insider Buying and Selling at California Water Service Group

In other news, Director Lester Snow sold 500 shares of the company's stock in a transaction on Tuesday, September 1st. The shares were sold at an average price of $50.21, for a total transaction of $25,105.00. Following the transaction, the director directly owned 17,817 shares of the company's stock, valued at $894,591.57. This represents a 2.73% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Thomas Krummel sold 3,700 shares of the company's stock in a transaction dated Thursday, August 13th. The stock was sold at an average price of $50.37, for a total transaction of $186,369.00. Following the transaction, the director owned 20,104 shares in the company, valued at $1,012,638.48. The trade was a 15.54% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 0.78% of the company's stock.

Key Headlines Impacting California Water Service Group

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

• Positive Sentiment: Revenue increased 6.7% year over year to $332.17 million in the third quarter, matching analyst expectations. The company’s regulated utility model and continued infrastructure investment support relatively stable cash flows. California Water Service Q3 revenue increases 6.7% to $332.2 million
• Positive Sentiment: The board declared a quarterly dividend of $0.335 per share, payable November 20 to shareholders of record November 9. This is CWT’s 327th consecutive quarterly dividend, reinforcing its appeal to income-focused investors and representing an annualized $1.34 payout, or roughly a 2.8% yield. California Water Service Group declares its 327th consecutive dividend
• Neutral Sentiment: Recent commentary highlighted water utilities as defensive, regulated businesses with decades of dividend payments. That may support demand for CWT among conservative investors, although the sector’s regulated rate-setting process can limit near-term growth. These 4 Boring Dividend Stocks Get Paid Every Time America Turns on the Tap
• Negative Sentiment: Third-quarter EPS was $1.05, below the $1.16 consensus estimate by $0.11, despite rising from $1.03 a year earlier. The earnings shortfall is the clearest likely reason for the stock’s weakness, particularly with CWT trading at approximately 21 times earnings. California Water Service Group third-quarter earnings report

California Water Service Group Company Profile

California Water Service Group NYSE: CWT is a holding company that provides water utility services through its regulated operating subsidiaries. The company supplies clean water for residential, commercial, industrial and institutional customers, and its operations include the production, treatment, storage, distribution and delivery of water. Some of its subsidiaries also provide wastewater collection and treatment services.

The company's principal subsidiary, California Water Service Company, serves communities throughout California.

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