SJW
Sjw Group
NASDAQ
8-K: SJW Group Reports Strong 2024 Results, Exceeds EPS Guidance and Announces Increased Capital Plan
Sentiment:
Annual Results
27 February 2025 12:38 AM
SJW Group announces strong 2024 financial results with diluted EPS of $2.87 and adjusted diluted EPS of $2.95, exceeding guidance, and unveils a 25% increase in its five-year capital plan to $2.0 billion.
Better than expected
SJW Group's 2024 adjusted diluted EPS of $2.95 exceeded the company's guidance.
Summary
- SJW Group reported net income of $94.0 million, or $2.87 diluted EPS, for 2024, an 11% increase compared to 2023.
- Adjusted net income was $96.8 million, or $2.95 adjusted diluted EPS, a 15% increase from the previous year.
- Operating revenue increased by 12% to $748.4 million, driven by rate increases, higher customer usage, and customer growth, primarily in Texas.
- Operating expenses rose by 11% to $577.9 million, mainly due to higher water production expenses, administrative and general expenses, depreciation, and maintenance costs.
- The company invested $353 million in infrastructure and water supply in 2024, exceeding its guidance of $332 million.
- SJW Group plans to invest $2.0 billion over the next five years, a 25% increase from the previous plan, to fund infrastructure replacement, PFAS remediation, and additional water supplies.
- The company is introducing 2025 adjusted diluted EPS guidance of $2.90 to $3.00.
- SJW Group expects long-term diluted EPS growth of 5% to 7% through 2029, anchored off of 2022's diluted EPS of $2.43.
- The board declared a quarterly cash dividend of $0.42 per share, payable on March 3, 2025, representing a 5% increase over the previous dividend.
- The 2025 annualized dividend is expected to be $1.68 per share, compared to $1.60 per share in 2024.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results, increased capital investment, and dividend growth. While there are some challenges related to rising expenses, the overall tone is optimistic and suggests a stable and growing company.
Positives
- SJW Group exceeded its 2024 EPS guidance.
- The company increased its five-year capital plan by 25% to $2.0 billion, indicating a strong commitment to infrastructure investment.
- Operating revenue increased by 12% in 2024, demonstrating solid growth.
- The company increased its quarterly cash dividend by 5%, reflecting confidence in its financial performance.
- SJW Group was recognized by Newsweek as one of America's Most Responsible Companies 2025.
Negatives
- Operating expenses increased by 11% in 2024, primarily due to higher water production expenses and administrative costs.
- The effective consolidated income tax rate increased from 7% to approximately 9% due to the year-over-year effect of the higher uncertain tax position reserve release in 2023 and tax deficiencies related to share-based payments in 2024.
Risks
- The company's guidance is subject to risks and uncertainties, including regulatory actions, changes in demand for water, weather conditions, climate change impacts, and general economic conditions.
- The company faces risks related to contamination of water supplies and damage to infrastructure.
- The company is exposed to risks related to work stoppages, strikes, and other labor-related actions.
- The company is exposed 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 is introducing 2025 adjusted diluted EPS guidance of $2.90 to $3.00 and expects long-term diluted EPS growth of 5% to 7% through 2029, anchored off of 2022's diluted EPS of $2.43. Based on current business conditions, SJW believes it will achieve growth over the period in the top half of the range.
Management Comments
- SJW Group Chair, CEO, and President Eric W. Thornburg stated, 'I am pleased to report another year of strong performance, driven by our talented teams and a proven business strategy that delivers results.'
- Thornburg added, 'Our year-over-year EPS growth, exceeding our 2024 guidance, and substantial infrastructure investments demonstrate our commitment to building a strong foundation for sustainable growth.'
- Thornburg also stated, 'We will continue leveraging our national presence and scale to drive efficiency, optimize operations, and empower our local experts to deliver high-quality water and exceptional service at affordable rates to the customers and communities we serve, today and into the future.'
Industry Context
SJW Group's focus on infrastructure investment and regulatory outcomes aligns with the broader trend in the water utility industry to modernize aging infrastructure and address emerging challenges such as PFAS contamination. The company's expansion in Texas also reflects the growing demand for water services in rapidly developing regions.
Comparison to Industry Standards
- American Water Works Company (AWK) and Essential Utilities (WTRG) are comparable companies in the water utility sector.
- SJW Group's planned $2.0 billion capital investment over the next five years is a significant commitment, comparable to similar investments being made by other large water utilities to upgrade infrastructure and address regulatory requirements.
- The company's focus on PFAS remediation is in line with industry-wide efforts to address emerging contaminants in drinking water.
Stakeholder Impact
- Shareholders will benefit from increased dividends and potential EPS growth.
- Customers will benefit from improved water infrastructure and service quality.
- Employees will have opportunities for growth and development within a stable and expanding company.
- Communities will benefit from SJW Group's commitment to environmental responsibility and community engagement.
Next Steps
- The company will continue to execute its five-year capital plan.
- SJW Group will focus on achieving its 2025 adjusted diluted EPS guidance of $2.90 to $3.00.
- The company will continue to pursue regulatory approvals for rate increases and infrastructure projects.
- SJW Group will continue to monitor and address risks related to water supply, infrastructure, and regulatory changes.
Key Dates
- October 1, 2024: An increase in the Water Infrastructure and Conservation Adjustment (WICA) surcharge was effective in Connecticut.
- October 25, 2024: Maine Water filed a GRC application for the Camden-Rockland Division with the Maine Public Utilities Commission (MPUC).
- December 19, 2024: The CPUC approved the settlement agreement between San Jose Water and the Public Advocates Office in their 2025 through 2027 GRC application.
- December 31, 2024: Maine Water filed a petition with the MPUC to unify tariffs across the company's ten rate districts.
- January 1, 2025: New rates went into effect for San Jose Water.
- January 14, 2025: The CPUC granted San Jose Water, along with three other Class A California water utilities, a one-year deferment in their 2025 Cost of Capital (COC) filings.
- January 28, 2025: Connecticut Water filed an application with PURA for a revenue increase of approximately $1.6 million related to $15.7 million in completed eligible projects.
- January 29, 2025: The directors of SJW Group declared a quarterly cash dividend on common stock of $0.42 per share.
- February 10, 2025: Shareholders of record date for the quarterly cash dividend.
- February 24, 2025: CWC filed its 2024 Water Revenue Adjustment (WRA).
- February 26, 2025: SJW Group announced its 2024 annual and fourth quarter financial results.
- February 27, 2025: Live webcast presentation to review results for 2024.
- March 3, 2025: Payment date for the quarterly cash dividend.
- April 1, 2025: The 2024 WRA, if approved by PURA, will be effective for 12 months beginning on this date.
- April 28, 2025: Archive of the webcast will be available until this date.
- May 1, 2026: Deferred Cost of Capital (COC) filings due.
Keywords
SJW Group, financial results, EPS, capital plan, water utility, infrastructure, dividend, revenue, expenses, guidance
SJW
Sjw Group
NASDAQ
Sector: Utilities
Filings with Classifications
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
29 April 2025 4:55 PM
Quarterly Report
- Net income increased by 41% due to rate increases in California and Connecticut.
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.
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
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.
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.
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.
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.
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
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.
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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