American States Water Co (AWR) Reports 23.2% Increase in Q3 2023 Earnings
AWR's Q3 2023 consolidated diluted EPS increased by 23.2% compared to Q3 2022.
The company filed a water utility general rate case in August 2023 for new rates in the years 2025 - 2027.
AWR's water utility segment, Golden State Water Company (GSWC), adopted a lower cost of debt of 5.1% as compared to 6.6% previously authorized.
AWR's Board of Directors approved a fourth quarter dividend of $0.43 per share on AWRs Common Shares.
On November 6, 2023, American States Water Co (NYSE:AWR) announced its third quarter 2023 results, reporting a significant increase in earnings. The company's consolidated diluted earnings per share (EPS) for Q3 2023 increased by 23.2% compared to the same period in 2022. This increase was driven by new water rates approved by the California Public Utilities Commission (CPUC) and a favorable variance resulting from the cost of capital proceeding.
Financial Highlights
AWR reported basic and fully diluted earnings per share of $0.85 for Q3 2023, compared to $0.69 for Q3 2022, marking an increase of $0.16 per share, or 23.2%. This increase includes a favorable variance of $0.04 per share resulting from the impact of accounting estimates recorded in Q3 2022 for revenues subject to refund related to the pending cost of capital proceeding, which were subsequently reversed during Q2 2023 upon receipt of a final decision adopted by the CPUC.
AWR's water utility segment, Golden State Water Company (GSWC), recorded diluted earnings of $0.72 per share for Q3 2023, compared to $0.54 per share for the same period in 2022, an increase of $0.18 per share. This increase was largely due to an increase in water operating revenues of approximately $13.5 million, primarily as a result of the second-year rate increases related to the three months ended September 30, 2023.
Regulatory Matters
On June 29, 2023, a final decision was adopted by the CPUC in the cost of capital proceeding at AWRs regulated water utility segment, GSWC. The decision adopted a lower cost of debt of 5.1% as compared to 6.6% previously authorized. All adjustments to rates are to be prospective and not retroactive.
Dividends
On October 30, 2023, AWRs Board of Directors approved a fourth quarter dividend of $0.43 per share on AWRs Common Shares. Dividends on the Common Shares will be paid on December 1, 2023 to shareholders of record at the close of business on November 15, 2023.
Year-To-Date 2023 Results
For the nine months ended September 30, 2023, AWR reported a $1.21 per share increase in recorded year-to-date 2023 consolidated diluted EPS compared to the same period in 2022. This increase reflects the impact of retroactive rates of $0.38 per share related to the full year of 2022 due to receiving a final decision in the water utility general rate case.
AWR's Q3 2023 earnings report demonstrates the company's strong financial performance, driven by new water rates and a favorable variance from the cost of capital proceeding. The company's commitment to delivering value to its shareholders is evident in its decision to increase dividends for the fourth quarter of 2023.
Explore the complete 8-K earnings release (here) from American States Water Co for further details.
This article first appeared on GuruFocus.
