Otter Tail (OTTR) Q3 2026 earnings summary

Executive summary

• Q3 net income fell 24.0% to $59.5M from $78.3M, and diluted EPS declined to $1.41 from $1.86; Plastics weakness and higher Electric costs outweighed Manufacturing growth.

• Nine-month net income was $124.5M versus $224.1M, including a $103.5M PVC antitrust settlement charge; adjusted nine-month EPS was $4.79 versus $5.32.

• FY26 adjusted EPS guidance midpoint remained $5.88 as the range narrowed to $5.73-$6.03; long-term EPS growth and total shareholder return targets remain 7%-9% and 10%-12%.

Financial highlights

• Q3 revenue was $320.5M versus $325.6M; operating income was $68.9M versus $96.6M. Nine-month revenue rose 0.6% to $1.002B, while operating income fell to $129.9M from $278.1M.

• Nine-month operating cash flow was $307.9M versus $288.9M; cash used in investing was $446.2M versus $216.0M, primarily reflecting higher capital expenditures.

• Q3 corporate net income declined $3.1M to $0.5M, mainly from lower tax benefits and investment income.

Outlook and guidance

• FY26 adjusted diluted EPS guidance narrowed to $5.73-$6.03, midpoint $5.88; reported EPS guidance is $3.89-$4.19, with adjusted guidance excluding $1.84 per share for the legal settlement.

• Adjusted ROE guidance is 12.5%-13.1%; five-year rate-base CAGR is 10%, with similar utility earnings growth expected and no dependence on large-load additions.

• Long-term EPS growth target is 7%-9% using 2028 as the base year; total shareholder return target is 10%-12%, and 2028 Plastics earnings are projected at $45M-$50M.

• FY26 adjusted EPS ranges by segment: Electric $2.62-$2.68; Manufacturing $0.32-$0.36; Plastics $2.95-$3.11; Corporate $(0.16)-$(0.12).