Introduction & Market Context
American States Water Company (NYSE:AWR) reported solid first-quarter 2025 results, with earnings per share rising 13% year-over-year, supported by recent regulatory approvals for its water and electric utilities. The company’s financial results presentation, delivered on May 8, highlighted strengthened performance across its regulated business segments while maintaining its remarkable 70-year streak of consecutive dividend increases.
The utility company’s stock responded positively to the earnings announcement, rising 1.07% in after-hours trading to close at $79.60, according to available market data. With a beta of 0.64, AWR continues to demonstrate lower volatility than the broader market while delivering consistent returns to shareholders.
Quarterly Performance Highlights
American States Water reported consolidated diluted earnings per share of $0.70 for Q1 2025, an increase of $0.08 per share or 13% compared to $0.62 in the same period last year. Total (EPA:TTEF) operating revenues reached $148.0 million, up $12.7 million from Q1 2024.
As shown in the following segment breakdown of diluted EPS, both regulated utilities contributed to the earnings growth:
The water segment led the way with EPS of $0.52, up from $0.48 in Q1 2024, while the electric segment contributed $0.07, improving from $0.05 a year earlier. The contracted services segment, which operates water and wastewater systems at military bases, maintained stable earnings of $0.13 per share.
Operating revenues showed similar positive trends across the regulated segments:
Water revenues increased by $11.7 million to $102.0 million, primarily driven by rate increases and higher consumption. Electric revenues rose by $2.8 million to $15.0 million, benefiting from a recent rate case decision. Contracted services revenues declined slightly to $31.0 million from $32.8 million, primarily due to lower construction activity affected by unfavorable weather conditions during the quarter.
Detailed Financial Analysis
The following bridge chart provides a clear view of the factors driving the $0.08 EPS improvement from Q1 2024 to Q1 2025:
The primary driver of earnings growth was increased water revenues from 2025 rate increases and higher consumption, contributing $0.23 per share. This was partially offset by higher water supply costs ($0.08 per share), increased operating expenses ($0.04 per share), and higher other expenses ($0.05 per share). The electric segment contributed $0.02 per share improvement, largely resulting from the final CPUC general rate case decision.
On the expense side, total operating expenses increased by $6.3 million to $102.5 million, with water and electric supply costs rising by $4.3 million due to higher consumption. Administrative and general expenses increased by $1.6 million, while maintenance costs rose by $0.9 million. These increases were partially offset by a $2.8 million reduction in ASUS construction expenses.
Regulatory Developments
A significant highlight of the quarter was the approval of rate cases for both the water and electric utilities. On January 30, 2025, the California Public Utilities Commission (CPUC) issued a final decision in Golden State Water Company’s general rate case, determining new water rates for 2025-2027 and authorizing $573.1 million in capital infrastructure investments over the three-year period.
Similarly, on January 16, 2025, the CPUC adopted a final decision for Bear Valley Electric Service’s general rate case, setting new electric rates retroactive to January 1, 2023, and approving $75.6 million in capital infrastructure investments over a four-year rate cycle.
These regulatory approvals provide clear visibility for AWR’s capital investment plans and revenue growth over the next several years. The company’s water rate base has shown consistent growth, as illustrated in this chart:
The water rate base has grown at a compound annual growth rate of 10.3% from 2018 to 2024, reaching $1,357.5 million. With the newly authorized capital investments, this growth trajectory is expected to continue.
Liquidity & Capital Structure
American States Water maintained strong liquidity in the first quarter, with operating cash flows of $45.1 million, slightly down from $45.8 million in Q1 2024. The company invested $45.5 million in company-funded capital projects during the quarter and expects total capital expenditures for 2025 to be between $170-$210 million.
To support its capital program, AWR raised $25.8 million through its at-the-market (ATM) equity program during Q1. Additionally, Bear Valley Electric Service issued $50 million in unsecured private placement notes in February 2025. The company also extended its credit facility terms from June 2028 to June 2029 and increased AWR’s borrowing capacity by $30 million to $195 million.
The company maintains strong credit ratings, with S&P assigning A and A+ ratings to AWR and Golden State Water Company, respectively, and Moody’s providing an A2 rating for Golden State Water.
Dividend Growth & Shareholder Returns
American States Water continues to deliver consistent returns to shareholders through its dividend program. The Board of Directors approved a second quarter cash dividend of $0.4655 per share, maintaining the company’s remarkable streak of 70 consecutive years of dividend increases.
As shown in the following chart, the company’s quarterly dividend has grown at a compound annual rate of 8.8% since 2019:
This consistent dividend growth demonstrates AWR’s commitment to returning value to shareholders while maintaining the financial flexibility to fund its capital investment program.
Forward-Looking Statements
Looking ahead, American States Water expects its contracted services segment (ASUS) to contribute between $0.59 and $0.63 per share in 2025. The company received a record $56.5 million in new capital upgrade projects in 2024 for completion through 2027, providing visibility for future growth in this segment.
For the regulated utilities, the recently approved rate cases provide a clear path for revenue and earnings growth over the next several years. The company plans to invest between $170-$210 million in infrastructure in 2025, supporting its long-term growth objectives.
With a strong balance sheet, stable regulatory environment, and diversified business model across water, electric, and military contracts, American States Water appears well-positioned to continue delivering consistent financial results and shareholder returns.
Full presentation:
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