The chart below shows how CWT performed 10 days before and after its earnings report, based on data from the past quarters. Typically, CWT sees a -0.37% change in stock price 10 days leading up to the earnings, and a +2.66% change 10 days following the report. On the earnings day itself, the stock moves by +0.87%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Q3 Revenue Surge: 1. Significant Revenue Growth: Operating revenue for Q3 2024 increased by 17.5% to $299.6 million, up from $255 million in Q3 2023, driven by a $42.2 million increase in rates and a $9.6 million rise in customer usage.
Net Income Surge: 2. Substantial Net Income Increase: Net income for Q3 2024 was $60.7 million, or $1.03 per diluted share, compared to $34.4 million, or $0.60 per diluted share in Q3 2023, reflecting a $26.3 million increase year-over-year.
Strong Capital Investment Commitment: 3. Record Capital Investments: Capital investments during the first nine months of 2024 totaled $332.2 million, representing 86% of the planned $385 million for the year, indicating strong commitment to infrastructure development.
Rate Base Expansion: 4. Strong Rate Base Growth: The overall rate base is projected to grow to $2.36 billion by the end of 2024, marking a 7.3% increase over 2023, with potential compounded annual growth of 11.7% if the 2024 GRC is approved.
Ongoing Dividend Commitment: 5. Consistent Dividend Payments: The Board of Directors declared a $0.28 per share dividend, marking the 319th consecutive quarterly dividend, demonstrating ongoing commitment to returning value to shareholders.
Negative
Operating Expenses Increase: 1. Increased Operating Expenses: Q3 2024 operating expenses rose to $232.8 million, a $21 million increase from $211.5 million in Q3 2023, primarily due to higher water production costs and increased depreciation.
MRAM Reduction Impact: 2. Reduction in MRAM: The Monterrey water rate adjustment mechanism (MRAM) saw a $9.4 million reduction in Q3 2024, negatively impacting earnings per share by $0.12.
Increased Income Tax Expenses: 3. Higher Income Taxes: Year-to-date income tax expenses increased by $41.1 million compared to 2023, primarily due to higher pretax earnings, which could strain future profitability.
Capital Investment Requirements: 4. Significant Capital Investment Needs: The company plans to invest an additional $226 million in PFOS projects starting in Q4 2024, indicating a substantial financial burden ahead.
Cash Position Decline: 5. Declining Cash Position: As of September 30, 2024, cash and cash equivalents were $105.2 million, with $45.6 million classified as restricted, limiting available liquidity for operational needs.
California Water Service Group (CWT) Q3 2024 Earnings Call Transcript
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