Shares of California Water Service (NYSE: CWT) plummeted 5.04% in intraday trading on Thursday after the company reported third-quarter earnings that fell short of analyst expectations. The water utility's financial results highlighted the challenges faced by the company in a year marked by declining water usage and regulatory uncertainties.

California Water Service reported quarterly earnings of $1.03 per share, unchanged from the same period last year but significantly below the analyst consensus estimate of $1.22. The company's revenue for the quarter came in at $311.2 million, up 3.9% year-over-year, but still missed the analyst forecast of $321.3 million. The revenue shortfall was primarily attributed to declining customer water usage, which decreased revenue by $8.1 million, partially offset by rate changes and adjustments in the Monterey-Style Water Revenue Adjustment Mechanism.

Despite the earnings miss, the company highlighted its ongoing investments in water infrastructure, with $135.2 million invested during the third quarter, representing a 14.8% increase over the same period last year. However, investors seem to be focusing on the near-term challenges, including the regulatory environment. The company is currently awaiting a decision on its 2024 General Rate Case in California, which has added uncertainty to its financial outlook. While inflation-based interim rate increases have been authorized starting January 2026, the delay in the regulatory decision appears to be weighing on investor sentiment.