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Jun 30, 2021
Otter Tail Q2 2021 Earnings Report
Otter Tail reported strong Q2 2021 financial results, driven by Plastics segment performance and unique market conditions.
Key Takeaways
Otter Tail Corporation announced a significant increase in consolidated net income, driven by the Plastics segment's strong performance due to unique market conditions. The corporation increased its 2021 diluted earnings per share guidance range.
Consolidated operating revenues increased 48.2% to $285.6 million.
Consolidated net income increased 147.7% to $42.1 million.
Diluted earnings per share increased 140.5% to $1.01 per share.
Increased 2021 diluted earnings per share guidance range to $3.50 to $3.65.
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 2021 diluted earnings per share guidance range to $3.50 to $3.65, driven by expected performance in the Plastics Segment.
Positive Outlook
- Electric segment earnings in 2021 will exceed 2020 earnings driven by the Merricourt and Astoria Station projects being commercially operational.
- MPUC has approved an interim rate increase of 3.2% or $6.9 million in annual revenues.
- Manufacturing segment earnings are expected to increase compared with 2020 based on strong performance at BTD.
- Earnings from T.O. Plastics are expected to increase due to strong horticulture markets and improving operating margins.
- Plastics segment operating margins during the first six months have been higher than expected driven by unique market conditions.
Challenges Ahead
- Increased non-labor operating and maintenance expenses related to a planned outage this fall at Big Stone Plant of $3.9 million in 2021.
- Increased postretirement expense caused by a decrease in the discount rate and long-term rate of return on plan assets.
- Decreased mill capacity due to COVID-19 has created raw material availability challenges.
- Concerns over the ability to obtain the steel needed to meet customer demands and continues to keep steel prices elevated above historic levels.
- Resin suppliers continued to have customers on resin allocations and increase prices for raw materials due to market conditions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income