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EarningsQ3 2026 Earnings Report
CWT Q3 2026 EPS Results
Actual EPS$1.05
Consensus EPS$1.16
Beat/MissMissed by -$0.11
One Year Ago EPS$1.03
CWT Q3 2026 Revenue Results
Actual Revenue$332.17M
Expected Revenue$332.17M
Beat/MissMissed by -$5.00K
YoY Revenue Growth+6.73%
Earnings Announcement Details
QuarterQ3 2026
Date10/29/2026
TimeBefore Open
Conference CallThursday, October 29, 2026
CWT Upcoming Earnings
California Water Service's next earnings date is estimated for March 3, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
CWT Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was predominantly positive, with year-to-date revenue and earnings growth, record infrastructure investment, strong financing access, regulatory approvals, acquisition progress, dividend growth, and stable authorized returns. The company also reported operational challenges from lower customer usage, higher wholesale water, fuel and material costs, increased taxes and integration expenses, and potential permitting or weather-related capital timing issues. Management nevertheless expressed confidence in the 2026 plan, the California step increase, acquisition closing, and funding outlook.Company Guidance
Third-Quarter Revenue and Earnings Growth
Third-quarter net income was $65.4 million, or $1.05 per diluted share, compared with $61.2 million, or $1.03 per diluted share, in the third quarter of 2025. Revenue increased $21 million, or 6.7%, to $332.2 million, driven primarily by $22.1 million from rate changes and new customers and $3.9 million from changes in the Drought Response Memorandum Account.
Strong Year-to-Date Financial Performance
Year-to-date net income was $125.9 million, or $2.07 per diluted share, compared with $116.7 million, or $1.96 per diluted share, in the prior-year period. Year-to-date revenue increased $75.1 million, or 9.6%, to $855.3 million, supported by rate increases and new customers, interim rates memorandum account revenue, remaining deferred WRAM revenue, and DREMA revenue.
Record Infrastructure Investment
Third-quarter capital expenditures were $148 million, bringing year-to-date infrastructure investment to a record $425 million. The company said its 10-year compounded annual growth rate for growth capital is approximately 11%, while its planned annual capital growth is generally 10% to 11%.
Potential California Step Increase
The company said its successful 2026 capital program positions it well to capture a substantial portion of the $49 million California step increase available for 2027 rates, subject to the earnings test. The filing is expected around November 15.
Rate Base Growth Opportunity
The company is projecting compounded annual rate base growth of nearly 12%, reaching approximately $3.5 billion by the end of 2028, assuming planned capital investments are completed on schedule.
Strong Liquidity and Financing Position
At quarter end, the company had $45.1 million in cash and cash equivalents, $45.8 million in restricted cash, $200 million of available short-term borrowing capacity at Group, and $225 million at Cal Water. It raised $49.8 million through its at-the-market equity program, entered into forward equity sales expected to generate $77.8 million in net proceeds, and signed agreements for $125 million of unsecured debt at Group and $150 million of mortgage bonds at Cal Water.
Financing Secured Through 2027
Management said the long-term debt and equity financing arrangements provide the resources needed to pay down existing short-term debt balances and finance ongoing initiatives into the first half of 2027, including the Oregon and Nevada acquisitions. The debt offering was described as oversubscribed by 6x, 7x, or 8x depending on the part of the structure.
Stable Authorized Returns
The Moody's Utility Bond Index adjustment mechanism was not triggered, so Cal Water's authorized 10.27% return on equity remains in effect through 2027. The authorized return on rate base remains 7.46%, with an authorized capital structure of 53.4% equity and 46.6% debt.
Regulatory Approvals Supporting Revenue
The Washington UTC approved a $4.1 million revenue increase effective October 1, and the Hawaii Public Utilities Commission approved a $1.94 million increase for the Kapalua systems. California regulators also authorized an advice letter process to seek approximately $113 million of PFAS-related capital cost recovery and an additional $2.5 million for certain PFAS projects.
PFAS Program Progress and Litigation Recovery
The company has approximately $228 million of planned PFAS investment across California, New Mexico, and Washington. Through the third quarter, it had invested $23.3 million in treatment and well replacement, bringing total program investment to date to $47.5 million. The program includes 65 planned projects, with 18 California sites under construction, and the company has recovered net litigation proceeds of $59.4 million to offset the planned investment.
Affordability Maintained During Capital Growth
Management said the median Cal Water bill represents approximately 0.88% of median household income, below the EPA guideline that water rates below 2% of average household income are generally considered affordable. The company said it has kept the ratio around 1% from 2021 through 2025 while maintaining approximately 10% compounded annual growth in its capital investment line.
Dividend Growth and Track Record
The board declared the company's 327th consecutive quarterly dividend. The anticipated 2026 dividend is $1.34 per share, an 8.1% increase over 2025, and the company has recorded 59 consecutive years of dividend increases. Management said it plans around a 7% dividend growth target and a 50% to 60% payout ratio.
Oregon and Nevada Acquisition Progress
Integration planning for the Oregon and Nevada assets being acquired from Nexus Water Group remains on schedule and within budget. Oregon approval was received during the quarter, following Nevada approval in August, positioning the company to close the acquisitions before year-end. Management said financing is lined up and estimated one-time integration costs at $7 million to $9 million.
Texas Operations and Regulatory Progress
BVRT increased its customer base by 12% year to date during the third quarter. Its consolidated rate case was returned to the commission for approval with interim rates still in effect, and the change-in-control application was deemed complete. During the call, management also announced that the Texas rate case decision had been placed on the agenda for approval on November 5.
Community Service and Centennial Milestone
The company celebrated its 100-year anniversary, with the original Chico, Visalia, and Bakersfield systems still owned and operated by the company. During the quarter, it began providing water service to approximately 400 students at Indianola Elementary School after connecting the school to its system to address water-quality problems.
Emergency Preparedness and Response
Management said the company has standing procedures for wildfires, hurricanes, floods, and other disasters and has prepared its systems, backup generators, equipment, and field operations for the forecasted super El Niño winter. After a direct-hit hurricane in Hawaii caused approximately a couple million dollars of damage, the company reported no service outages.
Supply Chain Readiness
The company said it strengthened its supply chain during COVID-19 by advance-purchasing difficult-to-obtain inventory and remains well positioned on supplies. Management said it has been able to operate within budget lines despite inflationary increases.
CWT Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed