On May 2, water company California Water (NYSE:CWT) released first-quarter earnings for the period ended March 31.

  • Strong customer demand, resulting from an unusually dry season, drove revenue up 9.7%.
  • Operating income rose 6.4% year over year.
  • The company, which is currently yielding 3.2%, announced its 250th consecutive quarterly dividend on April 25.
  • California Water and its peer American States Water (NYSE:AWR) both sport two-star ratings from the Motley Fool CAPS community, while Southwest Water (NASDAQ:SWWC) ranks three stars.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$71,570

$65,216

9.7%

Net Profit

$1,581

$832

90.0%

EPS

$0.07

$0.04

75.0%

Diluted Shares

20,681

18,427

12.2%

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

63.9%

67.1%

(3.2)

Operating Margin

7.3%

7.6%

(0.2)

Net Margin

2.2%

1.3%

0.9

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$43,095

$5,061

751.5%

Accounts Rec.

$17,375

$13,291

30.7%

Inventory

$4,469

$4,284

4.3%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$32,151

$28,889

11.3%

Long-Term Debt

$291,379

$273,768

6.4%

The balance sheet reflects the company's health.

Cash Flow Highlights
Apparently, management at California Water is unaware of the Foolish take on free cash flow.

Related Foolishness:

California Water is a Motley Fool Income Investor pick. To find out what fair value James Early and his team place on CWT, along with dozens of other stocks, check out a 30-day free trial.

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