Otter Tail Q3 2021 Earnings Report
Key Takeaways
Otter Tail Corporation announced strong Q3 2021 results, with net income increasing by 46.8% to $52.8 million, driven by the Plastics segment. The company increased its 2021 diluted earnings per share guidance range to $4.05 to $4.20.
Consolidated operating revenues increased 34.2% to $316.3 million.
Consolidated net income increased 46.8% to $52.8 million primarily driven by strong Plastics segment performance resulting from unique market conditions.
Diluted earnings per share increased 44.8% to $1.26 per share.
The corporation increases its 2021 diluted earnings per share guidance range to $4.05 to $4.20 reflecting a range of 73% to 79% growth from 2020 reported diluted earnings per share of $2.34.
Otter Tail
Otter Tail
Otter Tail Revenue by Segment
Forward Guidance
The company is increasing its 2021 diluted earnings per share guidance range to $4.05 to $4.20, driven by expected performance in the Plastics segment.
Positive Outlook
- Electric segment guidance maintained.
- Manufacturing segment guidance maintained.
- Steel lead times have improved somewhat and supply has become less of an issue.
- Backlog for the manufacturing companies of approximately $90 million for 2021 compared with $59 million one year ago.
- Pounds of pipe sold in 2021 are now expected to be slightly higher than 2020 driven by strong construction and municipal markets.
Challenges Ahead
- We anticipate elevated steel prices will continue throughout the remainder of 2021 and into 2022.
- Resin suppliers continued to enforce resin allocations to customers and increase prices for raw materials due to market conditions such as availability constraints related to feedstock supplies for resin and a strong export market that has higher resin prices than the domestic market.
- Unexpected PVC resin supply constraints arose from the extreme cold weather in February which caused resin suppliers to temporarily close various petrochemical plants.
- Supply constraints were further exacerbated in the third quarter due to the impacts from Hurricane Ida, which caused resin suppliers to again enforce force majeure contract provisions.
- We currently expect these conditions could moderate during the last half of 2022.
Revenue & Expenses
Visualization of income flow from segment revenue to net income