SAN JOSE, Calif., July 29, 2026 (GLOBE NEWSWIRE) -- California Water Service Group (Group or the Company, NYSE: CWT), a leading publicly traded water utility serving California, Hawaii, New Mexico, Washington and Texas, reported strong second-quarter 2026 results.

Second-Quarter 2026 Results Reflect Resolution of the 2024 California General Rate Case

The Company said second-quarter 2026 results were in line with expectations after it received a final decision on the 2024 California General Rate Case (2024 CA GRC) at the end of April. The Company recognized the decision retroactively to January 1, 2026, as provided for in its California Interim Rates Memorandum Account (IRMA).

Net income for the second quarter of 2026 was $56.5 million, or $0.93 per diluted share, compared with $42.2 million, or $0.71 per diluted share, in the second quarter of 2025. Revenue rose to $308.6 million from $265.0 million a year earlier.

IRMA revenue related to the delayed 2024 CA GRC and implementation of new rates added $15.3 million, including $9.2 million related to the first quarter of 2026. Rate changes and changes in regulatory mechanisms contributed another $15.0 million. Higher customer consumption increased revenue by $4.1 million because of weather-related differences between the two quarters. Deferred revenue expected to be collected within the next 24 months under prior-year regulatory mechanisms added $9.3 million.

Operating expenses in the second quarter increased to $237.7 million from $213.1 million in the same period of 2025. Water production costs rose by $6.3 million, mainly because of higher wholesale water rates. Other operations expenses increased by $13.4 million, including $7.9 million tied to recognized deferred revenue from prior-year regulatory mechanisms and $2.1 million related to conservation program activities. Depreciation and amortization expenses fell by $6.5 million because of lower depreciation rates in California approved in the 2024 CA GRC. Income taxes increased by $7.0 million due to a reduction in Tax Cuts and Jobs Act (TCJA) deferred accrued income tax amortization and higher pre-tax income.

Year-to-Date 2026 Results Also Reflect the 2024 CA GRC Decision

For the first half of 2026, net income was $60.5 million, or $1.01 per diluted share, compared with $55.5 million, or $0.93 per diluted share, in the first half of 2025. Revenue increased to $523.2 million from $468.9 million.

IRMA revenue related to the delayed 2024 CA GRC and implementation of new rates added $15.3 million. Rate changes and changes in regulatory mechanisms added $29.5 million. Deferred revenue expected to be collected within the next 24 months related to prior-year regulatory mechanisms added $8.5 million.

Year-to-date operating expenses were $434.1 million, compared with $394.8 million in the prior-year period. Water production costs increased by $14.7 million, primarily because of higher wholesale water rates. Other operations expenses increased by $15.8 million, including $8.0 million related to recognized deferred revenue from prior-year regulatory mechanisms and $2.6 million related to conservation program activities. Depreciation and amortization expenses decreased by $2.5 million due to lower depreciation rates in California approved in the 2024 CA GRC. Income taxes increased by $6.0 million as a result of a reduction in TCJA deferred accrued income tax amortization and higher pre-tax income.

“Receiving the final decision in our 2024 CA GRC provides the regulatory framework needed to continue investing in the infrastructure our customers depend on, while supporting long-term earnings and cash flow visibility,” said Chairman and Chief Executive Officer Martin A. Kropelnicki. “The decision authorizes meaningful rate adjustments through 2028, approximately $1.68 billion of infrastructure investments through 2027, and new revenue stabilization mechanisms that better align cost recovery with our investment profile and help mitigate the impacts of changes in customer water usage.”

“During the quarter, we also achieved a record level of infrastructure investment as we continue modernizing and strengthening our water systems across our service territories. In addition, we made meaningful progress on our planned acquisition of Nexus Water Group's systems in Nevada and Oregon, including filing Change of Control applications with the applicable regulatory agencies. Finally, we declared our 326th consecutive quarterly dividend,” Kropelnicki added. “These actions reflect our disciplined approach to investing in our business, growing our regulated footprint, and creating long-term value for our customers, communities and stockholders.”

Cal Water Receives Final Decision on the 2024 CA GRC

Subsidiary California Water Service Company (Cal Water) received a final decision from the California Public Utilities Commission (CPUC) on its 2024 CA GRC and Infrastructure Improvement Plan on April 30, 2026.

The decision authorizes rate adjustments expected to increase company-wide revenue by $90.5 million, or 10.9%, in 2026; $43.2 million, or 4.7%, in 2027; and $48.9 million, or 5.1%, in 2028. It also authorizes about $1.45 billion of pre-approved infrastructure investments through 2027 to support continued delivery of safe, clean and reliable water service, with up to an additional $229 million of projects eligible for recovery through the CPUC's advice letter process.

The decision renews key revenue stabilization mechanisms, including the Monterey-style Water Revenue Adjustment Mechanism and water production incremental cost balancing accounts, establishes a new Sales Reconciliation Mechanism, and approves a rate design that increases recovery of fixed costs regardless of water sales. The Company said these mechanisms are intended to support more predictable cost recovery while helping mitigate the financial impact of customer usage variability and other uncertain costs.

Company Invests a Record $147 Million in Infrastructure in the Second Quarter

In the second quarter of 2026, the Company invested $147 million in infrastructure needed to continue providing safe and reliable water supply to customers, compared with $119 million in the second quarter of 2025. Through the first half of 2026, the Company invested a record $276.4 million in infrastructure, compared with $229.5 million in the first half of 2025. Based on the final 2024 CA GRC decision, the Company said it anticipates investing up to $627 million in 2026.

Company Continues Progress on Water System Acquisitions

In February 2026, the Company announced an agreement to acquire Nexus Water Group’s water and wastewater systems in Nevada and Oregon for approximately $218 million. The transaction is expected to add about 36,000 customer equivalent residential units and approximately $109 million of rate base, further strengthening its position as a regulated water and wastewater utility in the western United States.

The acquisition remains subject to customary regulatory approvals and closing conditions. The Company said it remains on track after filing Change of Control applications with the public utilities commissions in Nevada and Oregon in April and continuing integration activities. In Texas, the Company received notification that its change-in-control application has been deemed complete by the Public Utility Commission of Texas.

Company Declares Quarterly Dividend

During the first quarter, the Company announced its intent to increase the annual dividend by 8%, or $0.10 per common share, which is expected to result in an annualized dividend of $1.34 per common share. The Board of Directors declared a quarterly dividend of $0.3350 per common share, payable on August 21, 2026, to stockholders of record as of August 10, 2026.

This marks the Company’s 326th consecutive quarterly dividend and its 59th annual dividend increase.

For additional details, see the Form 10-Q, which will be available at: www.calwatergroup.com/investors/financials-filings-reports/sec-filings, or listen to the earnings teleconference or replay.

Quarterly Earnings Teleconference Scheduled

The quarterly teleconference will take place on July 30, 2026, at 8 a.m. PT/11 a.m. ET. To join, dial 1-800-715-9871 or 1-646-307-1963 and key in ID# 5478283, or access the live audio webcast at edge.media-server.com/mmc/p/p8cvrm58/.

A replay of the call will be available from 2 p.m. ET on July 30, 2026, through September 28, 2026, at 1-800-770-2030 or 1-609-800-9909 by keying in ID# 5478283, or by accessing the webcast above. The call will be hosted by Chairman and Chief Executive Officer Martin A. Kropelnicki and Senior Vice President, Chief Financial Officer and Treasurer James P. Lynch. Prior to the call, the Company will publish a slide presentation on its website.

About California Water Service Group

Group is the parent company of regulated utilities Cal Water, Hawaii Water Service, New Mexico Water Service and Washington Water Service, as well as Texas Water Service (TWSC, Inc.), a utility holding company. Together, these companies provide regulated and non-regulated water and wastewater service to more than 2.2 million people in California, Hawaii, New Mexico, Washington and Texas. Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for “safe harbor” treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and management’s beliefs, assumptions, judgments and expectations about the Company, the water utility industry and general economic conditions. These statements are not statements of historical fact.

When used in the Company’s documents, statements that are not historical in nature, including words such as will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks or variations of these words or similar expressions, are intended to identify forward-looking statements. Examples in this news release include, but are not limited to, statements describing the Company’s expected financial performance, expectations regarding the Company’s plans and proposals pursuant to the 2024 CA GRC, the anticipated closing of the Company’s acquisition of Nexus Water Group’s Nevada and Oregon subsidiaries, and the expected integration of the acquired systems and benefits resulting from the acquisition.

Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that the Company believes are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may differ materially from those contained in a forward-looking statement.

Factors that may cause actual results or outcomes to differ from those expected or anticipated include, but are not limited to: the outcome and timeliness of regulatory commissions’ actions concerning rate relief and other matters, including general rate cases and other regulatory proceedings; the impact of opposition to rate increases; the Company’s ability to recover costs; federal governmental and state regulatory commissions’ decisions, including decisions on proper disposition of property; changes in state regulatory commissions’ policies and procedures; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requirements, such as the U.S. Environmental Protection Agency’s (EPA) finalization of a National Primary Drinking Water Regulation (NPDWR) establishing legally enforceable maximum contaminant levels (MCL) for PFAS in drinking water in 2024, as well as legal challenges to such MCLs; EPA’s proposed new PFAS rulemaking, including impacts to the current PFAS NPDWR; weather, climate change, natural disasters, including wildfires and landslides, and actual or threatened public health emergencies, including disease outbreaks, on operations, water quality, water availability, water sales and operating results, and the adequacy of emergency preparedness; electric power interruptions, especially as a result of public safety power shutoff programs; availability of water supplies; the ability to invest or apply the proceeds from the issuance of common stock in an accretive manner; consequences of eminent domain actions relating to the Company’s water systems; increased risk of inverse condemnation losses as a result of weather, climate change and natural disasters, including wildfires and landslides; shifts in population, including housing and customer growth; issues with implementation, maintenance or security of information technology and operational technology systems; physical and cyber security risks and threats and the adequacy of efforts to mitigate them; the ability of enterprise risk management processes to identify or address risks adequately; labor relations matters as the Company negotiates with unions; changes in customer water use patterns and the effects of conservation, including as a result of drought conditions; the ability to complete, in a timely manner or at all, successfully integrate and achieve anticipated benefits from announced acquisitions, including the Oregon, Nevada and BVRT acquisitions; restrictive covenants in or changes to credit ratings on current or future debt that could increase financing costs or affect the ability to borrow, make payments on debt or pay dividends; risks associated with expanding business and operations, including into other geographic areas; the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown or a recession, changes in tariff policy, the interest rate environment, changes in monetary policy, adverse capital markets activity or macroeconomic conditions as a result of geopolitical conflicts, including ongoing conflicts in the Middle East, and the prospect of shutdowns of the U.S. federal government; the impact of market conditions and volatility on unrealized gains or losses on non-qualified benefit plan investments and operating results; the impact of weather and timing of meter reads on accrued and unbilled revenue; the impact of evolving legal and regulatory requirements, including sustainability requirements; the impact of the evolving U.S. political environment and changes effected, proposed or threatened by the U.S. federal government that has led to, in some cases, legal challenges and uncertainty around the funding, functioning and policy priorities of U.S. federal regulatory agencies and the status of current and future regulations; and other risks and unforeseen events described in the Company’s Securities and Exchange Commission (SEC) filings.

In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. When considering forward-looking statements, readers should keep in mind the cautionary statements included in this paragraph, as well as the Annual Report on Form 10-K, Quarterly 10-Q and other reports filed from time to time with the SEC. The Company is not under any obligation and expressly disclaims any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. A credit rating is not a recommendation to buy, sell or hold any securities, may be changed at any time by the applicable ratings agency and should be evaluated independently of any other information.