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AWR Q3 Earnings Miss Estimates on Higher Costs, Revenues Rise
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Key Takeaways
AWR's Q3 earnings of $1.06 per share miss estimates by 2.75%, as higher costs offset regulatory rate gains.
AWR's revenues rose 5.4% to $192.54M, driven by higher water and electric rates and increased consumption.
AWR's 2026 capex target is $185M-$220M and marks 72 consecutive years of annual dividend increases.
American States Water Company (AWR - Free Report) reported third-quarter 2026 earnings of $1.06 per share, unchanged year over year and missing the Zacks Consensus Estimate of $1.09 by 2.75%.
Higher operating costs, increased interest expenses and unfavorable retirement plan investment returns weighed on earnings despite benefits from regulatory rate increases.
Total Revenues
Operating revenues increased 5.4% to $192.54 million from $182.72 million, supported by higher water and electric revenues. Water consumption increased approximately 1% during the quarter.
American States Water Company Price, Consensus and EPS Surprise
Water segment revenues increased 5.7% year over year to $139.92 million. The improvement primarily reflected California Public Utilities Commission-authorized second-year rate increases effective Jan. 1, 2026, additional recovery from approved capital projects and higher consumption.
These gains were partially offset by a $1.9 million decrease in billed surcharges. Changes in surcharge revenues are offset by corresponding operating expenses, resulting in no net impact on earnings.
Electric segment revenues climbed 11.6% to $14.89 million, driven by authorized fourth-year rate increases and additional recovery of costs related to completed capital projects. Contracted Services revenues increased 1.8% to $37.73 million.
American States Water's Operating Costs Increase
Total operating expenses rose 3.5% year over year to $125.24 million. Depreciation and amortization expenses increased 10.4% to $13.17 million, reflecting additional capital investments placed into service.
American States Utility Services construction expenses increased 5.3% to $17.39 million. Administrative and general expenses remained relatively stable at $25.48 million, compared with $25.41 million a year earlier.
Operating income increased 9% to $67.29 million. Interest expenses rose 1.3% to $11.87 million, while other income, net, declined to $0.84 million from $3.01 million.
Net income increased 2.7% to $42.28 million. Third-quarter results included an unfavorable earnings impact of 5 cents per share from changes in retirement plan investment returns compared with the prior-year period.
Financial Highlights of American States Water
Operating cash flow totaled $201.72 million during the first nine months, compared with $202.01 million a year earlier. Capital expenditures amounted to $155.52 million, down from $173.13 million.
Cash and cash equivalents stood at $25.99 million as of Sept. 30, 2026, compared with $18.82 million at year-end 2025.
AWR's Capital Investment and Contract Outlook
American States Water expects its regulated utilities to invest $185-$220 million in capital infrastructure during 2026. These investments support utility infrastructure improvements and ongoing service requirements.
The Contracted Services business is projected to contribute 63-67 cents per share to full-year 2026 earnings. During the first nine months, the segment secured approximately $31 million in additional construction projects expected to be completed through 2029.
AWR completed its $200 million at-the-market equity offering program in June 2026. The company has no plans to issue additional equity through at least the end of 2029 to support current operations.
American States Water Maintains Dividend Growth
Board of directors of the company approved a fourth-quarter dividend of 54.55 cents per share, payable Dec. 2, 2026, to its shareholders of record as of Nov. 16.
American States Water increased its quarterly dividend by 8.2% during 2026, marking the 72nd consecutive calendar year of annual dividend increases.
The quarterly dividend rate has grown at a compound annual growth rate of 8.4% over the past five years. Management continues to target long-term dividend growth exceeding 7% annually.
American Water Works Company Inc. (AWK - Free Report) reported third-quarter 2026 adjusted earnings of $2.00 per share, which missed the Zacks Consensus Estimate of $2.11 by 5.21%. The bottom line increased 5.8% from $1.89 in the year-ago quarter. Earnings benefited from authorized rate increases and acquisitions, while higher operating costs weighed on profitability.
Revenues of $1.51 billion surpassed the Zacks Consensus Estimate of $1.47 billion by 2.57% and rose 4.1% year over year. Essential Utilities Inc. (WTRG - Free Report) reported third-quarter 2026 adjusted earnings of 38 cents per share, beating the Zacks Consensus Estimate of 35 cents by 8.57%.
Quarterly revenues of $508.3 million surpassed the Zacks Consensus Estimate of $499 million by 1.86%. The top line increased 6.6% from $477 million in the prior-year quarter. Higher regulatory recoveries, increased purchased gas costs and stronger natural gas consumption supported revenue growth.
California Water Service Group (CWT - Free Report) reported third-quarter 2026 earnings of $1.05 per share, up 1.9% from $1.03 in the year-ago quarter. The figure missed the Zacks Consensus Estimate of $1.22 by 13.93%.
Quarterly revenues increased 6.7% year over year to $332.2 million but missed the Zacks Consensus Estimate of $335 million by 0.76%.
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AWR Q3 Earnings Miss Estimates on Higher Costs, Revenues Rise
Key Takeaways
American States Water Company (AWR - Free Report) reported third-quarter 2026 earnings of $1.06 per share, unchanged year over year and missing the Zacks Consensus Estimate of $1.09 by 2.75%.
Higher operating costs, increased interest expenses and unfavorable retirement plan investment returns weighed on earnings despite benefits from regulatory rate increases.
Total Revenues
Operating revenues increased 5.4% to $192.54 million from $182.72 million, supported by higher water and electric revenues. Water consumption increased approximately 1% during the quarter.
American States Water Company Price, Consensus and EPS Surprise
American States Water Company price-consensus-eps-surprise-chart | American States Water Company Quote
AWR's Revenue Growth Reflects Higher Utility Rates
Water segment revenues increased 5.7% year over year to $139.92 million. The improvement primarily reflected California Public Utilities Commission-authorized second-year rate increases effective Jan. 1, 2026, additional recovery from approved capital projects and higher consumption.
These gains were partially offset by a $1.9 million decrease in billed surcharges. Changes in surcharge revenues are offset by corresponding operating expenses, resulting in no net impact on earnings.
Electric segment revenues climbed 11.6% to $14.89 million, driven by authorized fourth-year rate increases and additional recovery of costs related to completed capital projects. Contracted Services revenues increased 1.8% to $37.73 million.
American States Water's Operating Costs Increase
Total operating expenses rose 3.5% year over year to $125.24 million. Depreciation and amortization expenses increased 10.4% to $13.17 million, reflecting additional capital investments placed into service.
American States Utility Services construction expenses increased 5.3% to $17.39 million. Administrative and general expenses remained relatively stable at $25.48 million, compared with $25.41 million a year earlier.
Operating income increased 9% to $67.29 million. Interest expenses rose 1.3% to $11.87 million, while other income, net, declined to $0.84 million from $3.01 million.
Net income increased 2.7% to $42.28 million. Third-quarter results included an unfavorable earnings impact of 5 cents per share from changes in retirement plan investment returns compared with the prior-year period.
Financial Highlights of American States Water
Operating cash flow totaled $201.72 million during the first nine months, compared with $202.01 million a year earlier. Capital expenditures amounted to $155.52 million, down from $173.13 million.
Cash and cash equivalents stood at $25.99 million as of Sept. 30, 2026, compared with $18.82 million at year-end 2025.
AWR's Capital Investment and Contract Outlook
American States Water expects its regulated utilities to invest $185-$220 million in capital infrastructure during 2026. These investments support utility infrastructure improvements and ongoing service requirements.
The Contracted Services business is projected to contribute 63-67 cents per share to full-year 2026 earnings. During the first nine months, the segment secured approximately $31 million in additional construction projects expected to be completed through 2029.
AWR completed its $200 million at-the-market equity offering program in June 2026. The company has no plans to issue additional equity through at least the end of 2029 to support current operations.
American States Water Maintains Dividend Growth
Board of directors of the company approved a fourth-quarter dividend of 54.55 cents per share, payable Dec. 2, 2026, to its shareholders of record as of Nov. 16.
American States Water increased its quarterly dividend by 8.2% during 2026, marking the 72nd consecutive calendar year of annual dividend increases.
The quarterly dividend rate has grown at a compound annual growth rate of 8.4% over the past five years. Management continues to target long-term dividend growth exceeding 7% annually.
AWR’s Zacks Rank
American States Water currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Recent Releases
American Water Works Company Inc. (AWK - Free Report) reported third-quarter 2026 adjusted earnings of $2.00 per share, which missed the Zacks Consensus Estimate of $2.11 by 5.21%. The bottom line increased 5.8% from $1.89 in the year-ago quarter. Earnings benefited from authorized rate increases and acquisitions, while higher operating costs weighed on profitability.
Revenues of $1.51 billion surpassed the Zacks Consensus Estimate of $1.47 billion by 2.57% and rose 4.1% year over year.
Essential Utilities Inc. (WTRG - Free Report) reported third-quarter 2026 adjusted earnings of 38 cents per share, beating the Zacks Consensus Estimate of 35 cents by 8.57%.
Quarterly revenues of $508.3 million surpassed the Zacks Consensus Estimate of $499 million by 1.86%. The top line increased 6.6% from $477 million in the prior-year quarter. Higher regulatory recoveries, increased purchased gas costs and stronger natural gas consumption supported revenue growth.
California Water Service Group (CWT - Free Report) reported third-quarter 2026 earnings of $1.05 per share, up 1.9% from $1.03 in the year-ago quarter. The figure missed the Zacks Consensus Estimate of $1.22 by 13.93%.
Quarterly revenues increased 6.7% year over year to $332.2 million but missed the Zacks Consensus Estimate of $335 million by 0.76%.