The York Water Company Reports Three Months Earnings

Rhea-AI Summary

The York Water Company (NASDAQ:YORW) reported mixed financial results for Q1 2025. Operating revenues increased by $828,000 to $18.46 million, primarily driven by customer base growth and Distribution System Improvement Charge (DSIC) revenues. However, net income decreased by $689,000 to $3.64 million, with earnings per share falling $0.05 to $0.25. The company invested $9.3 million in capital projects during Q1 and plans to invest an additional $36.7 million throughout 2025 for infrastructure improvements. While benefiting from lower pension costs, the company faced challenges from reduced AFUDC and higher operation, maintenance, depreciation, and debt interest expenses.

Positive

• Operating revenues increased by $828,000 to $18.46 million
• Growth in customer base
• Lower pension costs
• Planned $36.7 million investment in infrastructure improvements for 2025
• Increased quarterly dividend to $0.2192 from $0.2108

Negative

• Net income decreased by $689,000 to $3.64 million
• Earnings per share declined by $0.05 to $0.25
• Higher operation and maintenance expenses
• Increased depreciation and interest on debt expenses
• Lower allowance for funds used during construction (AFUDC)

Insights

Utility Sector Financial Analyst

York Water reports revenue growth but earnings decline; balanced by continued infrastructure investment and dividend increase despite profitability pressure.

The York Water Company's Q1 2025 results present a mixed financial picture for this regulated water utility. Operating revenues increased 4.7% to $18,456,000, driven by customer base expansion and the Distribution System Improvement Charge (DSIC) - a Pennsylvania regulatory mechanism allowing utilities to recover costs for critical infrastructure replacement.

Despite this revenue growth, profitability metrics show concerning declines. Net income fell 15.9% to $3,638,000, with earnings per share dropping from $0.30 to $0.25 - a 16.7% decrease year-over-year. This earnings deterioration stems from multiple factors: lower allowance for funds used during construction (AFUDC), increased operation and maintenance expenses, higher depreciation charges, and elevated interest costs on debt. These negative factors outweighed the positive impact of revenue growth and lower pension expenses.

Capital deployment remains substantial, with $9.3 million invested in Q1 for infrastructure improvements including main extensions and enterprise software upgrades. Management plans an additional $36.7 million in capital expenditures for the remainder of 2025, focusing on infrastructure reliability, wastewater treatment plant construction, and system modernization.

Despite earnings pressure, the company increased its quarterly dividend by 4% to $0.2192 per share, suggesting management confidence in long-term fundamentals. The share count increased modestly from 14,325,000 to 14,381,000 year-over-year.

These results highlight the inherent challenge utilities face: balancing necessary infrastructure investment with near-term financial performance. While customer growth supports revenue expansion, the significant capital program appears to be pressuring earnings through higher costs and reduced AFUDC benefits, creating a financially neutral short-term picture despite the important infrastructure improvements underway.

YORK, Pa., May 06, 2025 (GLOBE NEWSWIRE) -- The York Water Company's (NASDAQ:YORW) President, JT Hand, announced the Company's financial results for the first quarter of 2025.

President Hand reported that first quarter operating revenues of $18,456,000 increased $828,000, but net income of $3,638,000 decreased $689,000 compared to the first quarter of 2024. Basic and Diluted Earnings per share of $0.25 for the three-month period decreased $0.05 compared to the same period last year.   Increased revenues were primarily due to growth in the customer base and revenues from the Distribution System Improvement Charge (DSIC). The DSIC is a Pennsylvania Public Utility Commission allowed charge that water utilities collect from customers for the replacement of aging infrastructure. The Company incurred lower pension costs. The increased revenue and lower pension costs were more than offset by a lower allowance for funds used during construction (AFUDC) and higher operation and maintenance expenses, depreciation, and interest on debt. AFUDC is the cost of debt and equity funds used to finance plant construction.

During the first three months of 2025, the Company invested $9.3 million in capital projects for main extensions and an upgrade to the enterprise software system, as well as various replacements and improvements to infrastructure and routine items. The Company estimates it will invest an additional $36.7 million in 2025, excluding acquisitions, for additional main extensions, wastewater treatment plant construction, a continuing upgrade to the enterprise software system, and routine improvements to its pipes, service lines, and other facilities to ensure a safe, adequate, and reliable supply of drinking water and to maintain proper handling and disposal of wastewater for the Company’s growing customer base.

	Three Months Ended March 31 In 000's (except per share)
	2025	2024
Operating Revenues	$18,456	$17,628
Net Income	$3,638	$4,327
Average Number of Common Shares Outstanding	14,381	14,325
Basic and Diluted Earnings per Common Share	$0.25	$0.30
Dividends Declared Per Common Share	$0.2192	$0.2108

This news release may contain forward-looking statements regarding the Company’s operational and financial expectations. These statements are based on currently available information and are subject to risks, uncertainties, and other events which could cause the Company’s actual results to be materially different from the results described in this statement. The Company undertakes no duty to update any forward-looking statement.

Contact Information:
JT Hand, President & CEO
jth@yorkwater.com
-OR-
Matthew E. Poff, Chief Financial Officer
matthewp@yorkwater.com

717-845-3601

FAQ

What were YORW's Q1 2025 earnings per share?

York Water Company reported earnings per share of $0.25 for Q1 2025, a decrease of $0.05 compared to $0.30 in Q1 2024.

How much revenue did York Water Company generate in Q1 2025?

York Water Company generated operating revenues of $18.456 million in Q1 2025, an increase of $828,000 from Q1 2024.

What is York Water's capital investment plan for 2025?

York Water plans to invest $36.7 million in 2025 for main extensions, wastewater treatment plant construction, enterprise software system upgrades, and infrastructure improvements.

What caused the decrease in YORW's net income for Q1 2025?

The decrease in net income was due to lower AFUDC and higher operation and maintenance expenses, depreciation, and interest on debt, which offset increased revenues and lower pension costs.

What is YORW's quarterly dividend for 2025?

York Water Company declared a quarterly dividend of $0.2192 per share, up from $0.2108 in the previous year.