Otter Tail (OTTR) Q4 2025 earnings summary

Executive summary

• 2025 diluted EPS was $6.55, at the upper end of guidance, with ROE at 16% on a 63% equity layer.

• 2025 results exceeded expectations, driven by strong execution in utility and manufacturing segments, though plastics earnings normalized.

• Dividend increased by 10% for the second consecutive year, marking 88 years of uninterrupted payments.

• Interim rate increases were implemented in Minnesota and South Dakota, supporting future revenue growth.

• Vinyltech expansion and other major projects progressed, with phase completions expected in 2026.

Financial highlights

• 2025 net income was $275.9 million, with diluted EPS of $6.55, down 9% year-over-year.

• Electric segment earnings rose over 7% year-over-year, while manufacturing and plastics earnings fell 16% and 15%, respectively.

• Segment EPS for 2025: Electric $2.32, Manufacturing $0.27, Plastics $4.05, Corporate $(0.09).

• Ended 2025 with $386 million in cash and available liquidity of $705.5 million.

• Residential electric rates were 34% below the national average in 2025.

Outlook and guidance

• 2026 diluted EPS guidance is $5.22–$5.62, with a midpoint ROE of 12%.

• Electric segment earnings expected to increase 14% in 2026, driven by rate base growth and interim revenues.

• Manufacturing segment earnings projected to rise 7% in 2026 on improved sales outlook.

• Plastics segment earnings expected to decrease 36% in 2026 as PVC prices continue to fall.

• Long-term EPS growth target of 7%-9% and total shareholder return of 10%-12%.