California Water Service Q2 revenue rises on retroactive rate increases

Overview

• U.S. water utility's Q2 revenue rose and beat analyst expectations

• Q2 adjusted EPS increased year-over-year

• Results reflect new rates from 2024 California General Rate Case

Outlook

• Company expects rate adjustments to increase revenue by $90.5 mln in 2026, $43.2 mln in 2027

• California Water Service anticipates investing up to $627 mln in infrastructure in 2026

• Company expects regulatory mechanisms to support more predictable cost recovery through 2028

Result Drivers

• RATE CASE IMPACT - Resolution of the 2024 California General Rate Case led to retroactive rate increases and new regulatory mechanisms, boosting revenue

• CUSTOMER CONSUMPTION - Increased customer water use, driven by climate variability, contributed to higher revenue

• INFRASTRUCTURE INVESTMENT - Record infrastructure spending in the quarter supported ongoing service reliability and growth

Company press release: ID:nGNX2Q9b3w

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the water related utilities peer group is "buy."

• Wall Street's median 12-month price target for California Water Service Group is $53.00, about 2.5% above its July 29 closing price of $51.73

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

• July 29 - American Water Q2 revenue beats estimates helped by rate increases, acquisitions

• July 27 - H2O America Q2 adjusted EPS beats estimates

• July 28 - Xylem raises annual profit forecast as AI growth lifts demand for water-treatment equipment

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)