UPDATE 1-California Water Service posts lower Q1 profit

(Recasts; adds details)

April 30 (Reuters) - California Water Service Group (CWT.N: Quote, Profile, Research) posted first-quarter profit below market estimates, citing lower demand and increase in expenses.

The water service provider reported net income of $185,000, or 1 cent per share, compared with $1.6 million, or 7 cents a share, a year earlier.

Revenue increased 2 percent to $72.9 million.

Analysts had expected the company to earn 9 cents a share on revenue of $75.6 million, according to Reuters Estimates.

"In 2008, we were affected by cool, wet winter weather, with many of our districts getting more than twice the rainfall than they did in the same period last year," Chief Executive Officer Peter Nelson said in a statement.

Total operating expenses increased by $1.8 million to $68.1 million.

Shares of the company closed at $38.70 Wednesday on the New York Stock Exchange. (Reporting by Sriram Iyer in Bangalore; Editing by Deepak Kannan)