Cal Water's 2Q revenue up nearly 25%
California Water Service Group reported net income of $10.1 million and earnings of $0.59 per share for the second quarter of 2004, compared to net income of $4.6 million and earnings of $0.30 per share for the same period of 2003.
SAN JOSE, CA, July 28, 2004 (BUSINESS WIRE) July 28, 2004 -- California Water Service Group announced net income of $10.1 million and earnings of $0.59 per share for the second quarter of 2004, compared to net income of $4.6 million and earnings of $0.30 per share for the same period of 2003.
Revenue for the second quarter increased $20.8 million, or 31%, to $88.8 million. Rate increases added $9.7 million to revenue and sales to new customers added $1.7 million. Sales to existing customers were also higher, increasing $9.4 million over the same period last year.
Total operating expenses for the second quarter increased 24%, or $14.3 million. Water production costs increased 28%, primarily due to increased water usage and rate increases by wholesale water suppliers. Other operations expenses increased by 12% as a result of increased costs for water treatment, insurance, labor, regulatory fees, and employee benefits. Depreciation expense increased 12% due to increases in 2003 capital expenditures. Income tax expense doubled due to the higher pre-tax income.
There was no effect from property sales for the current quarter, while gains of $1.0 million were posted in the second quarter of 2003.
"Our second quarter water sales were positively affected by hot, dry weather, which increased sales over the same period last year. Also, our improved results reflected rate relief we received from the California Public Utilities Commission," said President and Chief Executive Officer Peter C. Nelson.
On July 8, 2004, the California Public Utilities Commission (CPUC), in approving a rate increase of $1.1 million for the Salinas district, found that the Company should be fined $75,000 and reduced the return on equity by 50 basis points for the Salinas district as a result of the Company not properly reporting the acquisition of three small water systems. The time frame for the return on equity reduction is expected to be one year. The decision closes a proceeding in which the CPUC's Office of Ratepayer Advocates had recommended a penalty of nearly $10 million for the reporting error.
Including the Salinas decision, the CPUC has authorized rate increases totaling approximately $10 million in annual revenues year-to-date.
At their meeting today, Directors declared the 239th consecutive quarterly dividend on common stock in the amount of $0.2825. It is payable on August 20, 2004, to stockholders of record on August 9, 2004. The regular dividend on Series C preferred stock was also declared.
California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, Inc., and CWS Utility Services. Together these companies provide regulated and non-regulated water service to more than 2 million people in 100 California, Washington, New Mexico, and Hawaii communities.