California Water earnings rose in the third quarter of 2026, with net income increasing to $65.4 million from $61.2 million a year earlier. The utility said rate changes and new customers helped lift revenue, partly offsetting lower customer water usage.

Key Takeaways

  • Quarterly revenue rose 6.7% to $332.2 million, while diluted earnings per share increased to $1.05 from $1.03.
  • Approved rate increases in Washington and Hawaii are expected to add a combined $6.04 million in annual revenue.
  • The company expects to close its Nevada and Oregon acquisitions in the fourth quarter of 2026.

California Water earnings and revenue drivers

California Water Service Group reported its results on October 28, 2026. Third-quarter revenue increased from $311.2 million a year earlier. The company said rate changes and new customers added $22.1 million, while changes in a drought-related memorandum account contributed $3.9 million. Lower customer water usage reduced revenue by $4.4 million.

Operating expenses rose to $249.5 million from $240.6 million. Other operations expenses increased by $4.1 million, primarily because of higher water conservation program spending. Income tax expense on operating income also rose, which the company attributed to higher pre-tax income and a scheduled reduction in a tax refund.

For the first nine months of 2026, net income was $125.9 million, or $2.07 per diluted share, compared with $116.7 million, or $1.96 per share, a year earlier. Revenue rose to $855.3 million from $780.2 million.

Infrastructure spending and rate decisions

The company invested $148.3 million in water infrastructure during the third quarter. Nine-month capital investment reached $424.8 million, compared with $364.7 million in the same period of 2025.

In Washington, regulators approved a settlement that the company said will add $4.1 million to annual revenue, with rates effective October 1. After the quarter ended, the Hawaii commission approved a separate settlement for the Kapalua water and wastewater systems. The company’s Kapalua rate decision announcement says it enables an approximately $1.94 million annual revenue increase; the company said the new rates took effect October 21.

California Water also expects to invest $228.0 million in company-wide PFAS treatment and well replacement projects. It said it has recovered $59.4 million in net proceeds from PFAS manufacturers to help reduce the impact on customer rates.

Acquisitions, financing and dividend

Nevada and Oregon regulators approved the company’s acquisition of Nexus Water Group’s systems and operations in those states. California Water expects the acquisitions to close in the fourth quarter of 2026; they had not closed when the results were announced.

The company said it entered agreements after the quarter to issue $125 million in unsecured notes and $150 million in secured bonds, expected on or before December 31, 2026. It also declared a quarterly dividend of $0.335 per common share.

Next milestone

California Water scheduled its quarterly earnings call for October 29, 2026.

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