Otter Tail (OTTR) Q3 2024 earnings summary

Executive summary

• Q3 2024 diluted EPS decreased 7% to $2.03, with net income at $85.5 million, down from $92.0 million in Q3 2023; year-to-date earnings and net income are up 4% over last year, supporting increased annual guidance.

• 2024 annual earnings guidance midpoint raised to $7.07 per share, with a new range of $6.97–$7.17, reflecting strong Electric and Plastics segment performance.

• Electric segment earnings rose 16% year-over-year, driven by interim rates, favorable FERC ruling, and weather; Manufacturing and Plastics segment earnings fell 71% and 8%, respectively.

• 2024 indicated dividend increased 6.9% to $1.87 per share; quarterly dividend of $0.4675 per share declared.

• Return on equity over the last 12 months was 20%.

Financial highlights

• Q3 2024 operating revenues were $338.0 million, down from $358.1 million in Q3 2023; operating income for Q3 was $107.5 million, down 11.2% year-over-year.

• Year-to-date diluted EPS increased to $5.87 from $5.63 in the prior year period.

• Cash flow from operations for the nine months was $322.8 million, up $4.3 million year-over-year.

• Total available liquidity as of September 30, 2024, was $544 million.

• Return on equity (ROE) for 09/30/24 LTM was 20.2%.

Outlook and guidance

• 2024 EPS guidance increased to $6.97–$7.17, with midpoint up $0.15 from prior guidance.

• Electric segment earnings expected to rise 7% over 2023; Manufacturing guidance lowered due to weak Q4 outlook; Plastics guidance raised on better-than-expected Q3 and slower price declines.

• Anticipated 2024 earnings mix: 30% Electric, 70% Manufacturing and Plastics; long-term target remains 65% Electric, 35% non-electric.

• North Dakota rate case requests a 10.9% annual revenue increase; final decision expected early 2025.

• Minnesota IRP approved, directing procurement of 200–300 MW solar, 150–200 MW wind, and 20–75 MW battery storage by 2029.