SJW Corp ((SJW)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for SJW Corp showcased a robust financial performance, underscored by significant revenue growth and strategic capital investment plans. While the company celebrated regulatory approvals and recognition for corporate responsibility, it also acknowledged challenges such as increased water production costs, drought impacts in Texas, and rising PFAS treatment expenses.
Strong Financial Performance
SJW Group reported a nearly 11% increase in net income from 2023 on a GAAP basis, with diluted earnings per share reaching $2.87 and adjusted diluted earnings per share at $2.95 for 2024. These figures surpassed the company’s guidance, highlighting a strong financial footing.
Revenue Growth
The company achieved a notable revenue growth of 12% in 2024, totaling $748.4 million compared to $670.4 million in 2023. This increase was primarily driven by rate hikes and higher customer usage, reflecting a positive market response.
Significant Capital Investment
In 2024, SJW Group invested $353 million in water and wastewater utility infrastructure across four states. The company also announced an increase in its five-year capital plan by 25%, bringing the total to approximately $2 billion, indicating a strong commitment to infrastructure development.
Regulatory Approvals and Achievements
The company secured important regulatory approvals, including infrastructure recovery mechanisms in Maine and a record year of recovery through WICA in Connecticut. Additionally, SJW Group received CPUC approval for rate cases and deferred cost of capital filing in California, marking significant regulatory achievements.
Recognition for Responsibility and Safety
SJW Group was honored by Newsweek as one of America’s Most Responsible Companies for 2025 and received a platinum level award for construction safety for Connecticut Water, underscoring its commitment to corporate responsibility and safety.
Increased Cost of Water Production
The company faced a 14% increase in water production expenses in 2024, attributed to rate increases from water wholesalers and higher customer usage, posing a challenge to cost management.
Challenges in Texas Due to Drought
Severe drought conditions in Texas service areas necessitated water conservation measures, leading to reduced water usage and highlighting the need for improved system resiliency.
Rising PFAS Treatment Costs
The estimated costs for PFAS treatment have escalated, with Connecticut’s costs rising from $120 million to $190 million, and a total commitment of $300 million, presenting a significant financial challenge.
Forward-Looking Guidance
Looking ahead, SJW Group provided a 2025 guidance range of $2.90 to $3 per share and plans to invest $473 million in capital expenditures during 2025. The company aims for a long-term earnings growth rate of 5% to 7% through 2029, targeting the upper half of this range. Regulatory approvals, including a decision from the CPUC for San Jose Water’s 2025-2027 general rate case, further bolster the company’s strategic outlook.
In summary, SJW Corp’s earnings call highlighted a strong financial performance with substantial revenue growth and strategic investments. While the company celebrated regulatory achievements and corporate responsibility recognition, it also faces challenges such as increased production costs and environmental impacts. The forward-looking guidance suggests continued growth and investment, positioning SJW Corp for a promising future.