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Jun 30, 2023
Otter Tail Q2 2023 Earnings Report
Otter Tail's second quarter earnings decreased slightly due to lower revenues, but the company increased its full-year earnings guidance.
Key Takeaways
Otter Tail Corporation reported a decrease in consolidated operating revenues and net income for the second quarter of 2023, but increased its full-year diluted earnings per share guidance due to stronger than expected Plastics segment performance.
Consolidated operating revenues decreased 16% to $338 million.
Consolidated net income decreased 5% to $82 million.
Diluted earnings per share decreased 5% to $1.95 per share.
Increased 2023 diluted earnings per share guidance to a range of $5.70 to $6.00.
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 company increased its 2023 diluted earnings per share guidance to a range of $5.70 to $6.00, expecting the earnings mix to be approximately 35% from the Electric segment and 65% from the Manufacturing and Plastics segments.
Positive Outlook
- Continued strength in product sales prices and related margins in the Plastics segment.
- Slower rate of decline in sales prices and margins than previously expected.
- Better than expected results in the Corporate cost center due to gains on corporate-owned life insurance policies.
- Increased earnings on cash balance investments due to a higher balance of invested funds and a higher yield.
- Maintaining Manufacturing segment May 1, 2023 guidance.
Challenges Ahead
- Decrease in expected sales volumes over the remainder of 2023 in the Plastics segment.
- Lower second half earnings compared to the first half of 2023 as sales prices and margins are expected to decline modestly.
- Increase in operating and maintenance expenses in the Corporate cost center.
- Backlog for the manufacturing companies as of June 30, 2023 was approximately $200 million, compared with $245 million one year ago.
- Deviation from the long-term expected earnings mix of approximately 65% Electric/35% non-electric.
Revenue & Expenses
Visualization of income flow from segment revenue to net income