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Dec 31, 2021
Otter Tail Q4 2021 Earnings Report
Otter Tail reported record fourth quarter earnings driven by strong performance in the Plastics segment and increased revenues in the Electric segment.
Key Takeaways
Otter Tail Corporation announced record financial results for the quarter and year ended December 31, 2021. The Plastics segment benefited from unique industry supply and demand conditions, while the Electric segment saw increased earnings due to rate base growth. The company's board of directors increased the quarterly common stock dividend by 5.8%.
Consolidated operating revenues increased 46.9% to $333.2 million compared to Q4 2020.
Net income increased 176.5% to $51.6 million compared to Q4 2020.
Diluted earnings per share increased to $1.23, a 173.3% increase from $0.45 in Q4 2020.
The company expects 2022 diluted earnings per share to be in a range of $3.78 to $4.08.
Revenue by Segment
Forward Guidance
The corporation anticipates 2022 diluted earnings per share to be in the range of $3.78 to $4.08.
Positive Outlook
- Normal weather for 2022
- Year over year increase in rate base along with increased load growth from new and existing commercial and industrial customers.
- Lower expected plant outage costs in 2022 as the Big Stone Plant outage in 2021 had higher costs than what is expected related to the planned Coyote Plant outage in 2022.
- The discount rate for our pension plan for 2022 is 3.03% compared with 2.78% in 2021.
- Lower interest expense as the $140 million notes issued in November 2021 have a lower interest rate compared to the $140 million that was refinanced.
Challenges Ahead
- Higher depreciation and property tax expense driven by increasing rate base.
- Labor costs are expected to be higher in 2022 as open positions were filled during the last half of 2021 and are expected to be employed for all of 2022.
- Increasing insurance costs related to increase in insurable values and increase in insurance rates due to competitive market conditions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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