Otter Tail Q2 2024 Earnings Report
Key Takeaways
Otter Tail Corporation announced a 6% increase in diluted earnings per share to $2.07 compared to Q2 2023. The midpoint of the 2024 earnings guidance was increased by 8% to $6.92 per share. The company received approval from the Minnesota Public Utilities Commission on its Integrated Resource Plan.
Diluted earnings per share increased 6% to $2.07 compared to Q2 2023.
2024 earnings guidance increased 8% to $6.92 per share.
Minnesota Public Utilities Commission approved the Integrated Resource Plan.
Plastics segment earnings increased 9% due to higher sales volumes.
Otter Tail
Otter Tail
Otter Tail Revenue by Segment
Forward Guidance
Otter Tail Corporation is increasing its 2024 diluted earnings per share range to $6.77 to $7.07. The company expects the earnings mix in 2024 to be approximately 31% from the Electric segment and 69% from the Manufacturing and Plastics segments, net of corporate costs.
Positive Outlook
- Maintaining Electric segment earnings guidance, expecting a 7% increase over 2023.
- Better than expected financial results in the Plastics segment in Q2 2024.
- Slower decline in product sales prices than previously expected in the Plastics segment.
- Increase in expected income on cash equivalent investments due to higher anticipated yield.
- Increase in invested funds driven by higher earnings and cash flows from the Plastics segment.
Challenges Ahead
- Anticipated lower sales volumes in the Manufacturing segment due to softening end market demand.
- Declining operating margins in the Manufacturing segment due to lower production and sales volumes.
- Softer demand primarily within the recreational vehicle, agriculture, construction and horticulture markets.
- Reduced leverage of fixed manufacturing costs.
- Headwinds in end market demand within the Manufacturing segment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income