SJW Corp. (NYSE:SJW) today reported financial results for the third quarter ended September 30, 2011. Operating revenue was $73.9 million in the quarter compared to $70.3 million in 2010. The $3.6 million increase in revenue reflects cumulative rate increases of $4.4 million, $221,000 in new customers, partially offset by lower customer usage (a $1.4 million impact), and $353,000 in higher revenue from real estate operations.
Net income was $8.2 million and diluted earnings per common share were $0.44, compared to $10.8 million and $0.58 per share, respectively, in the third quarter of 2010.
Water production costs for the quarter ended September 30, 2011 were $32.0 million compared to $30.2 million in 2010, an increase of $1.8 million. The increase in water production costs is primarily attributable to $2.2 million in a higher per unit cost for purchased water and groundwater extraction charges, partially offset by $266,000 in lower costs caused by reduced customer water usage and an $82,000 reduction in costs due to an increase in use of available surface water supply.
Operating expenses, excluding water production costs, for the third quarter were $23.4 million compared to $22.3 million in 2010. The increase of $1.1 million reflects an additional $721,000 of depreciation expense, $436,000 of maintenance expenses and $341,000 more in taxes other than income tax, partially offset by a decrease of $352,000 in administrative and general expenses.In addition, 2010 income before taxes included $4.5 million gain on the sale of California Water Service group shares which did not recur in 2011. Income tax expense for the third quarter decreased to $5.4 million in 2011 from $7.3 million in 2010. Year-to-date operating revenue increased by $11.7 million to $176.6 million from $164.9 million in the first nine months of 2011. The increase was attributable to $8.9 million in cumulative rate increases, higher customer water usage (a $1.4 million impact), $544,000 in revenue from new customers and $910,000 in higher revenue from real estate operations.
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