What American States Water (AWR) Said on Its Q3 Earnings Call

Key Points

• Q3 earnings were flat at $1.06 per share, while adjusted earnings rose from $1.01 to $1.06 as higher regulated utility rates offset increased expenses and share dilution. Nine-month adjusted earnings increased 12.6% to $2.86 per share.
• Golden State Water filed a rate case seeking about $1 billion in capital budgets for 2028–2030; the utilities invested $149.3 million in capital projects through September and expect full-year spending of $185 million to $220 million.
• American States Water raised its quarterly dividend by 8.2% and has increased it for 72 consecutive years. ASUS is expected to contribute $0.63–$0.67 per share in 2026 and $0.67–$0.71 in 2027.

American States Water NYSE: AWR reported flat third-quarter earnings for 2026, while adjusted earnings rose as higher customer rates at its regulated utilities offset increased expenses and the dilutive effect of share issuances.

The company reported earnings of $1.06 per share, unchanged from the same period a year earlier. Excluding gains and losses on investments held to fund a retirement plan, adjusted earnings were $1.06 per share, up from $1.01 a year earlier. Changes in those investment returns reduced the year-over-year reported earnings comparison by $0.05 per share, President and CEO Bob Sprowls said.

Consolidated revenue rose $9.8 million from the third quarter of 2025. The water segment accounted for $7.6 million of the increase and the electric segment added $1.6 million, primarily because of new rates and revenue associated with capital projects approved for recovery in 2025, Chief Financial Officer Eva Tang said. Revenue at ASUS, the company’s military utility services business, increased $0.6 million, primarily because of higher management fees.

Higher Rates Lift Adjusted Water Earnings

Golden State Water, the company’s water utility, reported third-quarter earnings of $0.85 per share, compared with $0.86 a year earlier. On an adjusted basis, water earnings rose to $0.85 per share from $0.81, excluding the retirement-plan investment effects.

Tang said higher water rates and additional revenue from completed capital projects drove the adjusted increase, partially offset by higher operating and net interest expenses and a higher effective tax rate. Share issuances under the company’s at-the-market offering program also reduced earnings by $0.02 per share through dilution, she said.

The electric segment earned $0.05 per share, up from $0.04, as rate increases outweighed higher expenses and taxes. ASUS earned $0.17 per share, down from $0.19, primarily because of higher operating and construction expenses.

For the first nine months of 2026, reported earnings rose to $2.92 per share from $2.63. Adjusted earnings increased 12.6% to $2.86 per share from $2.54, with all three operating segments reporting year-over-year earnings gains.

Rate Cases and Infrastructure Spending

Golden State Water filed a general rate case in July covering 2028 through 2030, requesting approximately $1 billion in capital budgets over the three-year cycle. It also asked regulators to reinstate full revenue decoupling and a full water supply cost balancing account. A decision is scheduled for the fourth quarter of 2027, Sprowls said.

The CEO said the existing regulatory framework exposes earnings to fluctuations in customer consumption and changes in the mix of water sources. Year-to-date results benefited from approximately 1% higher consumption and a favorable supply mix, including less purchased water, but he cautioned that those conditions might not persist through year-end.

During the question-and-answer session, Sprowls said he was confident the water business would earn at or above its authorized return. Golden State Water’s authorized return on equity remains 10.06% through December 2027, following a cost-of-capital mechanism review that did not trigger an adjustment.

For Bear Valley Electric Service, Sprowls said a decision on its pending rate case is scheduled for the first quarter of 2027. New rates are intended to take effect Jan. 1, 2027, and Tang said the company would be able to book retroactive revenue if a decision is delayed by a few months.

The regulated utilities invested $149.3 million in company-funded capital projects through September and remained on pace to invest $185 million to $220 million for the full year, Tang said.

ASUS Outlook and Dividend

ASUS earned $0.47 per share through the first nine months and remains on track to contribute $0.63 to $0.67 per share for 2026, Sprowls said. The company projects a contribution of $0.67 to $0.71 per share in 2027. ASUS was awarded $31 million in new capital upgrade construction projects through September, with completion expected through 2029.

American States Water raised its quarterly dividend by 8.2% in the third quarter. Sprowls said the company has increased its dividend in each of the past 72 calendar years and maintains a policy targeting long-term compound annual dividend growth of more than 7%.

About American States Water (NYSE:AWR)

American States Water Company NYSE: AWR is a water and utility services company that provides regulated water and electric services, as well as contracted operations and maintenance services. The company serves residential, commercial, industrial and public-sector customers through its operating subsidiaries.

Through Golden State Water Company, American States Water supplies water to communities primarily in California. Its Bear Valley Electric Service subsidiary provides electric distribution service in the Big Bear area of San Bernardino County, California.

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