In This Article:
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Revenue: $225.1 million, a 10% increase from $204.8 million in Q3 2023.
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Net Income: $38.7 million, a 7% increase from $36.2 million in Q3 2023.
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Diluted Earnings Per Share (EPS): $1.17 compared to $1.13 in Q3 2023.
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Adjusted Net Income: $39 million.
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Adjusted Diluted EPS: $1.18.
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Year-to-Date Revenue: $550.6 million, a 10% increase from $499 million in the same period of 2023.
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Year-to-Date Net Income: $71 million, an 8% increase.
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Year-to-Date Diluted EPS: $2.18 compared to $2.09 in 2023.
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Capital Expenditure: $252 million invested year-to-date, 76% of the $332 million plan for 2024.
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Long-term Debt Raised: $125 million in Q3 2024.
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Effective Income Tax Rate: Approximately 5% in Q3 2024.
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Guidance for 2024 GAAP EPS: $2.65 to $2.75 per diluted share.
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Guidance for 2024 Non-GAAP EPS: $2.68 to $2.78 per diluted share.
Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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SJW Group (NYSE:SJW) reported a 10% increase in revenue for Q3 2024, driven by rate increases and higher pass-through water costs.
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Net income increased by 7% compared to the same quarter in 2023, reflecting strong financial performance.
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The company has invested $252 million year-to-date in water and wastewater utility infrastructure, advancing its five-year plan of $1.6 billion.
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SJW Group (NYSE:SJW) received recognition as one of America's Greenest Companies 2025 by Newsweek, highlighting its commitment to sustainability.
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The company secured an $8 million grant through the Grid Resilience and Innovation Partnerships Program to enhance operational resilience and reduce energy costs.
Negative Points
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Higher water production expenses increased by 16% compared to 2023, impacting overall costs.
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The company faces challenges in meeting new water quality standards and replacing aging infrastructure while maintaining affordability.
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Drought conditions in Texas have led to lower water usage, affecting revenue from that region.
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SJW Group (NYSE:SJW) experienced higher maintenance, administration, and general costs, contributing to an 8% increase in total operating expenses year-over-year.
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The company is dealing with regulatory challenges, including unresolved issues in the California Public Utilities Commission settlement agreement.
Q & A Highlights
Q: Can you discuss the usage trends in Texas and how they align with the 2024 guidance assumptions? Are they on track, ahead, or behind? Also, how do these trends and recent developments position you for 2025 relative to the 5% to 7% long-term growth rate? A: Andrew Walters, Chief Financial Officer, explained that Texas has experienced decreased usage due to conservation efforts, which impacts the total dollar amount but is not significant enough to adjust the guidance range. For 2025, despite ongoing drought conditions, the settled rate case and full-year Connecticut rate case are expected to support the long-term growth rate. The California rate increase for 2025 is expected to be more gradual, which benefits both customers and the company's earnings growth.