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Dec 31, 2020
Otter Tail Q4 2020 Earnings Report
Otter Tail's Q4 2020 earnings decreased due to a decline in Electric segment net income and increased corporate costs, despite improvements in Manufacturing and Plastics segments.
Key Takeaways
Otter Tail Corporation reported a decrease in net income for Q4 2020, driven by lower performance in the Electric segment and increased corporate costs, although the Manufacturing and Plastics segments showed improvements. The company's full-year earnings per share increased by 7.8%.
Consolidated operating revenues increased by 5.2% to $226.8 million compared to Q4 2019.
Net income decreased by 8.3% to $18.7 million compared to Q4 2019.
Diluted earnings per share decreased to $0.45 from $0.51 in Q4 2019.
The company expects 2021 diluted earnings per share to be in a range of $2.39 to $2.54.
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 anticipates 2021 diluted earnings per share to be in the range of $2.39 to $2.54.
Positive Outlook
- Merricourt and Astoria Station projects being commercially operational.
- Rate base being reflective of the total capital spend on these investments.
- Increased revenues related to $22 million in completed capital spend for self-funded generator interconnection agreements in 2020.
- The impact of our filed Minnesota 2021 rate case.
- An expected increase in sales at BTD driven mostly by improving end markets.
Challenges Ahead
- Increased non-labor operating and maintenance expenses related to a planned outage at Big Stone Plant of $3.9 million in 2021.
- Increases related to having the Merricourt and Astoria Station projects fully operational in 2021.
- Increased expenses caused in large part by a decrease in the discount rate used for the pension plan and a lower rate used for our long-term rate of return.
- Higher depreciation and property tax expense due to large capital projects being put into service.
- Increased interest costs associated with a full year’s interest expense on the $35 million and $40 million of senior unsecured notes that were issued in February and August of 2020, respectively.
Revenue & Expenses
Visualization of income flow from segment revenue to net income