According to their most recent news release, Otter Tail Corporation (OTTR:NYE), missed fourth-quarter earnings forecasts. The company’s GAAP earnings per share (EPS) of $1.00 fell short by $0.05, while its sales of $301.4 million fell short by $36.7 million, representing a fall of 9.5% year-over-year. On the other hand, the company’s consolidated return on equity was 25.6% on an equity ratio of 59.4%.
Despite the fourth-quarter shortfall, Otter Tail provided a positive prognosis for 2023. Long-term focus continues on implementing the company’s plan to expand its business, achieve operational, commercial, and talent excellence, and increase its position in the markets they serve.
The Electric section of Otter Tail forecasts roughly $1 billion in capital expenditures over the next five years, resulting in a 6.4% CAGR in rate base from the end of 2022 to the end of 2027. Using 2024 as the base year, the company anticipates a compound annual growth rate in profits per share between 5% and 7%.
Otter Tail stock announced a range of $3.76 to $4.06 for earnings per share in 2023, compared to the consensus estimate of $3.90. The business expects Plastics segment earnings to decline from their record high in 2022, as industry circumstances are anticipated to normalize over the year.
Beginning in 2024, Otter Tail anticipates a revenue split of about 65% from its Electric division and 35% from its manufacturing platform.
Despite the fourth-quarter earnings shortfall, Otter Tail remains optimistic about its long-term growth prospects and is investing heavily in its Electric business. In the following years, investors will closely monitor Otter Tail stock performance to determine if the business can achieve its ambitious expansion objectives.
Company Profile:
Otter Tail Corporation, together with its subsidiaries, engages in electric utility, manufacturing, and plastic pipe businesses in the United States.
The company’s Electric segment produces, transmits, distributes, and sells electric energy in Minnesota, North Dakota, and South Dakota; and operates as a participant in the Midcontinent Independent System Operator, Inc. markets.
The company’s Plastics segment manufactures polyvinyl chloride pipes for municipal water, rural water, wastewater, storm drainage and water reclamation system, and other uses.
The company was formerly known as Otter Tail Power Company and changed its name to Otter Tail Corporation in 2001. Otter Tail Corporation was founded in 1907 and is headquartered in Fergus Falls, Minnesota.
