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Mar 31, 2022
Otter Tail Q1 2022 Earnings Report
Announced record first quarter earnings and increased 2022 earnings guidance.
Key Takeaways
Otter Tail Corporation reported a significant increase in financial performance for the quarter ended March 31, 2022. Consolidated net income increased by 137% to $72 million, with diluted earnings per share rising by 136% to $1.72. The corporation has increased its 2022 diluted earnings per share guidance range to $5.15 to $5.45.
Consolidated operating revenues increased 43% to $375 million.
Consolidated net income increased 137% to $72 million.
Diluted earnings per share increased 136% to $1.72 per share.
Increased 2022 diluted earnings per share guidance range to $5.15 to $5.45.
Otter Tail
Otter Tail
Otter Tail Revenue by Segment
Revenue by Segment
Electric Revenue
CapyFin.comManufacturing Revenue
CapyFin.comPlastics Revenue
CapyFin.com Forward Guidance
The corporation is increasing its 2022 diluted earnings per share guidance to $5.15 to $5.45, driven by currently expected performance in the Plastics segment.
Positive Outlook
- Favorable weather in the first quarter of 2022 and normal weather for the remainder of 2022 in the Electric segment.
- Year-over-year increase in rate base along with increased load growth from new and existing commercial and industrial customers in the Electric segment.
- Lower expected plant outage costs in 2022 compared to 2021 in the Electric segment.
- Increase in sales at BTD driven by end market demand as customers continue to build inventory to fill shortages created by supply chain challenges in the Manufacturing segment.
- Increase in earnings from T.O. Plastics driven in large part by a full year of increases in product prices that occurred throughout 2021 and improved manufacturing productivity in the Manufacturing segment.
Challenges Ahead
- Higher depreciation and property tax expense driven by increasing rate base in the Electric segment.
- Labor costs are expected to be higher in 2022 as open positions were filled during the last half of 2021 and are expected to be employed for all of 2022 in the Electric segment.
- Increasing insurance costs related to increase in insurable values and increase in insurance rates due to competitive market conditions as well as increasing operating and maintenance expenses due to inflationary pressures resulting from our current economic environment in the Electric segment.
- Customers have other supply chain challenges which impact their ability to consistently take our product in line with their production timelines in the Manufacturing segment.
- We expect the last half of 2022 to see a decline in profitability in the Plastics segment as compared with the first half of 2022 due to resin prices are expected to decrease after July and given general economic concerns.
Revenue & Expenses
Visualization of income flow from segment revenue to net income