What does Otter Tail do and what are its main business segments?

What is Otter Tail's latest dividend and current dividend yield?

What is Otter Tail's gross profit margin?

Did Otter Tail beat or miss consensus estimates last quarter?

What is the market's earnings forecast for Otter Tail next quarter?

What factors drove the changes in Otter Tail's revenue and profit?

What guidance did Otter Tail's management provide for the next earnings period?

What is the revenue and EPS growth rate for Otter Tail year over year?

- **Revenue Growth**: 15% YoY driven by North American recovery.
- **AI-Driven Margin Expansion**: Gross margin improvement expected in H2.
- **Plastics Beat**: Q3 Plastics EPS exceeded expectations with 4% volume growth vs 17% price decline.
- **Updated 5-Year Plan**: $1.9B capex for 10% rate base CAGR, targeting 9-12% EPS growth.
- **Affordability Commitment**: Lowest rates in nation with cost-effective investments.
- **Long-Term Outlook**: 7-9% EPS CAGR post-2028 Plastics normalization.

### CEO Summary Section
- **Revenue Growth**: Q3 revenue grew 15% YoY, driven by North American market recovery.
- **AI Investment**: Emphasized continued investment in AI to improve gross margins in H2.
- **Production Expansion**: Vinyltech expansion added 26M pounds of capacity, with total Plastics segment capacity up 50M pounds over 2 years.
- **5-Year Plan Update**: Announced $1.9B capital spending plan for Otter Tail Power, targeting 10% CAGR in rate base and 9-12% EPS growth.
- **Affordability Focus**: Committed to cost-effective projects and customer rate affordability, with rates remaining among lowest in the nation.

### CFO Financial Commentary
- **Q3 Earnings**: Diluted EPS of $1.86 (-8% YoY), outpacing expectations due to Plastics segment margin improvements.
- **Segment Performance**: 
  - Electric: -0.03 EPS from weather and rate timing, offset by volume growth and O&M savings.
  - Manufacturing: +0.04 EPS from cost alignment and efficiency gains.
  - Plastics: -0.26 EPS from 17% price decline, offset by 4% volume growth and 16% resin cost drop.
- **2025 Guidance Update**: Raised EPS range to $6.32-6.62 (midpoint $6.47), driven by Plastics margin beat and narrowed outlook.
- **Balance Sheet Strength**: $325M cash, 16% ROE, and no equity needs through 2030.
- **Long-Term Outlook**: 7-9% EPS CAGR post-2028 Plastics normalization, with 70% EPS from Electric platform.

### Q&A Highlights
- **EPS Growth Shape**: Linear utility earnings growth aligned with rate base, with Manufacturing cyclicality.
- **Tax Rate**: No change to 2025 assumption, tracking as guided.
- **Antitrust Case**: DOJ intervention stayed discovery; motion to dismiss filed, with decision expected in 2026.
- **Cash Allocation**: Prioritize utility capex, dividend (12% increase), and opportunistic M&A.
- **Large Load**: 155MW interruptible customer reduces fixed costs with minimal capex impact.

Otter Tail Corporation (OTTR) Q3 2025 Earnings Call Transcript

Electric

Manufacturing

Plastics

OTTR

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