SJW
Sjw Group
NASDAQ
8-K: SJW Group Announces Q3 2024 Results, Plans Nasdaq Listing Transfer
Sentiment:
Quarterly Report
28 October 2024 9:02 AM
SJW Group reported a 7% year-over-year increase in GAAP diluted earnings per share for the third quarter of 2024 and announced its intention to transfer its stock listing to Nasdaq.
Better than expected
The company's GAAP diluted EPS of $1.17 and adjusted diluted EPS of $1.18 for Q3 2024 both represent year-over-year increases, indicating better than expected performance.
Summary
- SJW Group announced its financial results for the third quarter of 2024, reporting a net income of $38.7 million, or $1.17 diluted EPS, a 7% increase compared to the same quarter last year.
- Adjusted net income for the quarter was $39.0 million, or $1.18 per diluted share, a 4% increase compared to the prior year.
- The company's operating revenue for the quarter was $225.1 million, up from $204.8 million in the same quarter last year, primarily driven by rate increases.
- Operating expenses increased by 12% to $166.7 million, mainly due to higher water production, maintenance, and administrative costs.
- Year-to-date, net income was $71.0 million, or $2.18 diluted EPS, an 8% increase compared to the same period last year.
- The company invested $252 million in infrastructure through the first nine months of 2024, representing 76% of its 2024 capital budget.
- SJW Group reaffirmed its 2024 GAAP diluted EPS guidance of $2.65 to $2.75 and adjusted diluted EPS guidance of $2.68 to $2.78.
- The company also declared a $0.40 cash dividend per share of common stock.
- SJW Group plans to transfer its stock listing from the NYSE to Nasdaq, with trading expected to begin on Nasdaq on or about November 8, 2024.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, infrastructure investments, and a strategic move to Nasdaq. The company's reaffirmation of guidance and long-term growth targets further contribute to the positive sentiment.
Positives
- SJW Group experienced a 7% increase in GAAP diluted EPS and a 4% increase in adjusted diluted EPS for the third quarter of 2024 compared to the same period last year.
- The company's operating revenue increased to $225.1 million in Q3 2024, driven by rate increases.
- SJW Group has invested $252 million in infrastructure year-to-date, demonstrating a commitment to growth and maintenance.
- The company reaffirmed its 2024 earnings guidance, indicating confidence in its financial outlook.
- SJW Group was recognized by Newsweek as one of America's Greenest Companies 2025.
- Connecticut Water was recognized as a top regional workplace for the fourth consecutive year.
- The company has a long history of paying dividends, with over 80 consecutive years of payments and 56 consecutive years of dividend increases.
Negatives
- Operating expenses increased by 12% in Q3 2024, primarily due to higher water production costs, maintenance, and administrative expenses.
- The company experienced a higher effective tax rate for the first nine months of 2024 compared to the same period in 2023.
- Water usage restrictions in Texas due to drought conditions are expected to impact revenue for the remainder of 2024.
Risks
- The company's performance is subject to regulatory risks, including decisions on rates and capital expenditures.
- Changes in weather conditions and water supply can impact demand and revenue.
- The company faces risks related to contamination of water supplies and damage to infrastructure.
- General economic, political, and financial market conditions can affect the company's performance.
- The company's ability to obtain financing on favorable terms is subject to various factors, including credit ratings and interest rates.
- The company is subject to risks related to work stoppages, strikes and other labor-related actions.
- The company is subject to risks related to catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or similar occurrences.
Future Outlook
SJW Group reaffirmed its 2024 GAAP diluted EPS guidance of $2.65 to $2.75 and adjusted diluted EPS guidance of $2.68 to $2.78. The company also reiterated its non-linear long-term diluted EPS growth of 5% to 7%, anchored off of 2022's diluted EPS of $2.43.
Management Comments
- Eric W. Thornburg, SJW Group Chair, CEO, and President, stated that the financial results demonstrate the benefits of the company's national platform and local water utility operations.
- Thornburg also acknowledged the company's recognition by Newsweek as one of 'America's Greenest Companies 2025' and Connecticut Water's recognition as a Top Workplace.
Industry Context
SJW Group's performance reflects the ongoing need for infrastructure investment in the water utility sector. The company's focus on regulatory filings and rate cases is typical for regulated utilities. The recognition as one of America's Greenest Companies highlights the increasing importance of sustainability in the industry.
Comparison to Industry Standards
- SJW Group's Q3 2024 EPS growth of 7% is solid compared to other regulated water utilities, which often see more modest growth rates.
- The company's capital expenditure of $252 million year-to-date is significant, indicating a strong commitment to infrastructure upgrades, which is a key focus for water utilities.
- The planned transfer to Nasdaq is a strategic move that could provide access to a different investor base and potentially lower costs, similar to moves made by other companies seeking to optimize their listing.
- The settlement agreement with the California Public Utilities Commission, allowing for a $53.1 million revenue increase over three years, is a positive development, comparable to other utilities securing rate increases to fund infrastructure projects.
- The company's long-term EPS growth target of 5% to 7% is in line with industry expectations for regulated utilities.
Stakeholder Impact
- Shareholders will benefit from the increased earnings, dividend payments, and potential for long-term growth.
- Customers will benefit from the company's investments in infrastructure and water supply.
- Employees will benefit from the company's recognition as a top workplace and commitment to sustainability.
- The company's commitment to sustainability and environmental responsibility will benefit the broader community.
Next Steps
- SJW Group will complete the transfer of its stock listing to Nasdaq.
- The company will continue to invest in infrastructure and pursue regulatory approvals for rate increases.
- A decision on the settlement agreement with the California Public Utilities Commission is expected in the fourth quarter of 2024.
- A decision on the Maine Water GRC application is expected in the second quarter of 2025.
- A decision on the Texas Water SIC application is targeted in the first half of 2025.
Key Dates
- August 19, 2024: San Jose Water and the Public Advocates Office filed a settlement agreement with the CPUC on the 2025-2027 GRC application.
- September 12, 2024: Texas Water filed an application with the Public Utilities Commission of Texas to increase annual revenue from its System Infrastructure Charge (SIC) surcharges.
- September 18, 2024: The Connecticut Public Utilities Regulatory Authority authorized a revenue increase for completed projects.
- September 30, 2024: End of the third quarter for which financial results are reported.
- October 1, 2024: The WICA surcharge increase in Connecticut became effective.
- October 25, 2024: SJW Group notified the NYSE of its intention to voluntarily withdraw its listing and transfer to Nasdaq. Maine Water filed a GRC application with the MPUC.
- October 28, 2024: SJW Group issued a press release announcing its Q3 2024 financial results.
- November 4, 2024: Record date for the declared dividend.
- November 7, 2024: Expected end of trading on the NYSE.
- November 8, 2024: Expected start of trading on Nasdaq.
- December 2, 2024: Payment date for the declared dividend.
- January 1, 2025: Anticipated effective date for new rates in California.
- January 20, 2025: End date for the archive of the webcast.
Keywords
water utility, financial results, earnings per share, infrastructure investment, rate increases, Nasdaq listing, dividend, regulatory, operating expenses, revenue
SJW
Sjw Group
NASDAQ
Sector: Utilities
Filings with Classifications
Better than expected
29 April 2025 4:55 PM
Quarterly Report
- Net income increased by 41% due to rate increases in California and Connecticut.
Capital raise
29 April 2025 4:55 PM
Quarterly Report
- SJW Group issued and sold 495,900 shares of common stock with a weighted average price of $53.87 per share, receiving $26.545 million in net proceeds under the Equity Distribution Agreement.
- Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 871,413 shares of common stock at a weighted average price of $54.56 for a total net proceeds of $46,713 and has $152,460 of aggregate gross sales price of shares remaining to issue under the Equity Distribution Agreement as of March 31, 2025.
Better than expected
28 April 2025 5:15 PM
Earnings Release
- The company's net income, diluted EPS, and adjusted diluted EPS all showed significant increases compared to the same quarter last year, indicating better-than-expected performance.
- Operating revenue also increased by 12%, driven by rate increases and higher customer usage, further contributing to the better-than-expected results.
Capital raise
27 February 2025 11:00 PM
Annual Results
- SJW Group may offer and sell shares of its common stock, $0.001 par value per share, from time to time in at-the-market offerings, having an aggregate gross sales price of up to $200,000.
Better than expected
27 February 2025 12:38 AM
Annual Results
- SJW Group's 2024 adjusted diluted EPS of $2.95 exceeded the company's guidance.
Capital raise
30 October 2024 6:38 AM
Equity Offering Announcement
- SJW Group has entered into an agreement to sell up to $200 million of its common stock.
- The offering will be conducted through at-the-market sales.
- The proceeds will be used for acquisitions, capital expenditures, debt repayment, and general corporate purposes.
Better than expected
28 October 2024 5:16 PM
Quarterly Report
- The company's net income increased by 7% year-over-year, exceeding expectations.
- Operating revenue increased by 10% year-over-year, indicating strong performance.
- The company's effective consolidated income tax rate was 5% for the three months ended September 30, 2024, lower than expected.
Capital raise
28 October 2024 5:16 PM
Quarterly Report
- SJW Group issued and sold 535,345 shares of common stock in the third quarter of 2024, generating $31.007 million in net proceeds.
- The company plans to raise approximately $35 million in long-term debt to pay down line of credit agreements, subject to market conditions.
- SJW Group intends to enter into a new equity distribution agreement to establish a new at-the-market offering program prior to the expiration of the current agreement on November 17, 2024.
Better than expected
28 October 2024 9:02 AM
Quarterly Report
- The company's GAAP diluted EPS of $1.17 and adjusted diluted EPS of $1.18 for Q3 2024 both represent year-over-year increases, indicating better than expected performance.
Better than expected
25 July 2024 4:58 PM
Quarterly Report
- The company's net income and revenue growth exceeded expectations due to rate increases and customer growth.
Capital raise
25 July 2024 4:58 PM
Quarterly Report
- SJW Group issued 584,630 shares of common stock for net proceeds of $32.3 million under its equity distribution agreement during the six months ended June 30, 2024.
- SJW Group subsidiaries plan to raise approximately $160 million in long-term debt to pay down the line of credit agreements during the balance of 2024.
Better than expected
24 July 2024 8:34 PM
Quarterly Report
- The company's second quarter results exceeded expectations with a 13% increase in net income and a 14% increase in adjusted net income compared to the same period last year.
- The company also increased its full year EPS guidance, indicating a positive outlook for the remainder of the year.
Delay expected
24 June 2024 5:40 PM
SEC Form 4 Filing
- 51 shares of Common Stock that were acquired as reinvested dividends and which were inadvertently excluded due to an administrative error.
Delay expected
26 April 2024 5:27 PM
Quarterly Report
- SJWC's Saratoga Water Treatment Plant remains offline until the updated operations plan is granted approval by the California Division of Drinking Water.
Capital raise
26 April 2024 5:27 PM
Quarterly Report
- In March 2023, SJW Group entered into Amendment No. 1 to the equity distribution agreement, dated November 17, 2021, between SJW Group and J.P. Morgan Securities LLC, Janney Montgomery Scott LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC, pursuant to which the company may offer and sell shares of its common stock, $0.001 par value per share, from time to time in at-the-market offerings, having an aggregate gross sales price of up to $240,000.
- For the three months ended March 31, 2024, SJW Group issued and sold a total of 126,025 shares of common stock with a weighted average price of $57.13 per share and received $7,006 in net proceeds under the Equity Distribution Agreement.
- Since the inception of the Equity Distribution Agreement, SJW Group has issued and sold 2,130,682 shares of common stock at a weighted average price of $72.60 for a total net proceeds of $151,004 and has $85,309 remaining under the Equity Distribution Agreement to issue into shares.
Worse than expected
25 April 2024 8:04 PM
Quarterly Report
- The diluted earnings per share decreased by 3% compared to the same quarter last year, indicating a slight underperformance in profitability.
Delay expected
25 April 2024 8:04 PM
Quarterly Report
- San Jose Water received approval for a one-year deferment in their 2024 Cost of Capital (COC) filings to May 1, 2025.
Better than expected
22 February 2024 8:15 PM
Annual Results
- The company's net income increased by 15% year-over-year, indicating better than expected financial performance.
Capital raise
22 February 2024 8:15 PM
Annual Results
- SJW Group issued $70 million in new long-term debt and $80.659 million in equity in 2023.
- The company has a remaining $92.509 million under the Equity Distribution Agreement to issue into shares.
Better than expected
21 February 2024 9:00 PM
Annual Results
- The company's 2023 earnings per share of $2.68 exceeded the initial guidance of $2.40 to $2.50 and was in line with the updated guidance of $2.65 to $2.70.
- SJW Group's infrastructure investments of $272 million surpassed the 2023 guidance of $255 million.
Delay expected
21 February 2024 9:00 PM
Annual Results
- The fourth quarter results were affected by the delayed decision in San Jose Water Company's 2022 general rate case (GRC) proceeding.
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