California Water Service Group (NYSE:CWT – Get Free Report) announced its quarterly earnings data on Thursday. The utilities provider reported $1.05 EPS for the quarter, missing the consensus estimate of $1.16 by ($0.11), reports. The firm had revenue of $332.17 million for the quarter, compared to analyst estimates of $332.17 million. California Water Service Group had a net margin of 12.78% and a return on equity of 7.75%. The firm’s revenue for the quarter was up 6.7% on a year-over-year basis. During the same quarter in the prior year, the firm earned $1.03 earnings per share.
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 Trading Up 2.0%
Shares of CWT stock traded up $0.97 on Friday, hitting $48.59. 603,535 shares of the stock traded hands, compared to its average volume of 402,739. The firm’s 50-day moving average price is $47.58 and its two-hundred day moving average price is $46.66. The company has a debt-to-equity ratio of 0.77, a quick ratio of 0.67 and a current ratio of 0.71. California Water Service Group has a twelve month low of $41.29 and a twelve month high of $53.82. The stock has a market capitalization of $3.00 billion, a PE ratio of 21.69, a PEG ratio of 1.69 and a beta of 0.48.
California Water Service Group Announces Dividend
The firm also recently announced a quarterly dividend, which will be paid on Friday, November 20th. Shareholders of record on Monday, November 9th will be paid a dividend of $0.3350 per share. This represents a $1.34 annualized dividend and a yield of 2.8%. The ex-dividend date of this dividend is Monday, November 9th. California Water Service Group’s payout ratio is 59.82%.
Key California Water Service Group News
Here are the key news stories impacting California Water Service Group this week:
- Positive Sentiment: Rate-base growth outlook supports future earnings: Management outlined nearly 12% annual rate-base growth through 2028, reaching approximately $3.5 billion, while targeting a share of a $49 million rate increase. This could improve the utility’s long-term revenue and earnings growth. California Water rate-base outlook
- Positive Sentiment: Analyst upgrade provides a near-term catalyst: Freedom Broker raised CWT from “hold” to “buy” and increased its price target from $49 to $53, implying additional upside from the referenced trading level. Freedom Broker rating update
- Positive Sentiment: Revenue increased 6.7% year over year to $332.2 million, matching expectations, helped by rate increases and customer growth. California Water third-quarter revenue report
- Positive Sentiment: Dividend continuity reinforces the defensive appeal: CWT declared its 327th consecutive quarterly dividend of $0.335 per share, payable November 20, 2026. California Water dividend announcement
- Negative Sentiment: Quarterly profit missed estimates: Adjusted earnings were $1.05 per share, below the $1.16 consensus estimate, as higher taxes and operating costs offset revenue growth and rate benefits. The miss may limit near-term upside until investors see better cost control. California Water third-quarter earnings miss
Insiders Place Their Bets
In other California Water Service Group news, Director Thomas M. 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 completion of the sale, the director directly owned 20,104 shares in the company, valued at $1,012,638.48. This represents a 15.54% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, Director Lester A. 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 completion of the sale, the director directly owned 17,817 shares in the company, valued at $894,591.57. This represents a 2.73% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Company insiders own 0.78% of the company’s stock.
Analyst Upgrades and Downgrades
A number of research analysts have weighed in on the stock. Freedom Broker raised shares of California Water Service Group from a “hold” rating to a “buy” rating and increased their target price for the company from $49.00 to $53.00 in a research report on Thursday. Weiss Ratings upgraded shares of California Water Service Group from a “hold (c)” rating to a “hold (c+)” rating in a research report on Tuesday, August 4th. Seaport Research Partners restated a “buy” rating and set a $53.00 target price on shares of California Water Service Group in a report on Wednesday, August 12th. Finally, Wall Street Zen upgraded California Water Service Group from a “sell” rating to a “hold” rating in a research note on Saturday, July 18th. One investment analyst has rated the stock with a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, California Water Service Group presently has a consensus rating of “Moderate Buy” and an average target price of $53.50.
Check Out Our Latest Report on CWT
About California Water Service Group
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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