Otter Tail Q1 2021 Earnings Report
Key Takeaways
Otter Tail Corporation announced strong first quarter results, with consolidated net income increasing 25.0% to $30.3 million, driven primarily by the Plastics segment. Diluted earnings per share increased 21.7% to $0.73. The corporation increased its 2021 diluted earnings per share guidance range to $2.47 to $2.62.
Consolidated operating revenues increased 11.5% to $261.7 million.
Consolidated net income increased 25.0% to $30.3 million primarily driven by strong Plastics segment performance.
Diluted earnings per share increased 21.7% to $0.73 per share.
Increased 2021 diluted earnings per share guidance range to $2.47 to $2.62.
Otter Tail
Otter Tail
Otter Tail Revenue by Segment
Forward Guidance
The corporation is increasing its 2021 diluted earnings per share guidance range to $2.47 to $2.62, driven by expected performance in the Plastics Segment. The Electric segment is expected to provide approximately 68% of consolidated earnings.
Positive Outlook
- Merricourt and Astoria Station projects being commercially operational and fully reflected in rate base.
- Recovery mechanism in place in all three jurisdictions for Merricourt and Astoria Station.
- Impact of filed Minnesota 2021 rate case with an approved interim rate increase of 3.2% or $6.9 million in annual revenues.
- Expected increase in sales at BTD driven mostly by improving end markets.
- Sales prices of PVC pipe in the first quarter were higher than expected and are expected to continue to be higher throughout the year.
Challenges Ahead
- Unfavorable weather in the first quarter negatively impacted first quarter earnings by $.04 per share.
- Commercial and Industrial revenues are expected to be lower based on continuing impacts from COVID-19.
- The level of self-funded interconnection interim projects revenue is pending FERC approval.
- Lower levels of capital expenditures and lower transmission revenue requirements resulting in a lower level of earnings than originally expected
- Increased non-labor operating and maintenance expenses related to a planned outage at Big Stone Plant of $3.9 million in 2021 and increased postretirement expense caused by a decrease in the discount rate and long-term rate of return on plan assets.
Revenue & Expenses
Visualization of income flow from segment revenue to net income