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Dec 31, 2024
Otter Tail Q4 2024 Earnings Report
Otter Tail Corporation reported a decline in revenue and net income for Q4 2024, driven by weak manufacturing demand and lower plastics pricing, partially offset by growth in the electric segment.
Key Takeaways
Otter Tail Corporation faced a 3.6% revenue decline and a 5.0% drop in net income in Q4 2024. The Electric segment showed strong growth, benefiting from rate increases and cost control, while the Manufacturing segment struggled with lower sales volumes. Plastics segment sales volumes increased but were offset by lower pricing. Overall, EPS declined by 5.1% YoY.
Revenue decreased 3.6% YoY to $303.11M.
Net income declined 5.0% YoY, driven by weak manufacturing and lower plastics pricing.
Electric segment net income grew 26.3% YoY due to rate increases.
EPS fell 5.1% YoY to $1.30.
Otter Tail
Otter Tail
Otter Tail Revenue by Segment
Revenue by Segment
Electric Revenue
CapyFin.comManufacturing Revenue
CapyFin.comPlastics Revenue
CapyFin.com Forward Guidance
Otter Tail expects a decline in earnings for 2025, with EPS guidance between $5.68 and $6.08. The Electric segment is projected to grow, but Manufacturing and Plastics will face headwinds due to weak demand and declining product prices.
Positive Outlook
- Electric segment earnings expected to grow 7% in 2025.
- 12% increase in average rate base for the Electric segment.
- Continued investment in infrastructure with a $1.4B five-year capital plan.
- Stable cash position with over $606M in liquidity.
- Long-term EPS growth target increased to 6-8%.
Challenges Ahead
- EPS projected to decline to $5.68-$6.08 from $7.17 in 2024.
- Plastics segment earnings expected to decline 29% due to falling product prices.
- Manufacturing segment earnings projected to drop 27% due to weak demand.
- Higher depreciation and interest expenses from capital investments.
- Planned maintenance outage at Coyote Station in 2025 will impact Electric segment costs.