Otter Tail (OTTR) - 2025 Q1 - Quarterly Results

Financial Performance - Otter Tail Corporation reported earnings of $68.1 million, or $1.62 per diluted share, for Q1 2025, aligning with expectations [2]. - The company maintains its 2025 diluted earnings per share guidance range of $5.68 to $6.08, expecting a return on equity between 13.8% and 14.6% [7][25]. - Net Income for Q1 2025 was $68,099,000, down 8.4% compared to $74,338,000 in Q1 2024 [31]. - Basic Earnings Per Share (EPS) decreased to $1.63 in Q1 2025 from $1.78 in Q1 2024, reflecting a decline of 8.4% [31]. - Operating Income for Q1 2025 was $83,999,000, a decrease of 11.5% from $94,975,000 in Q1 2024 [31]. - Total Operating Revenues for Q1 2025 were $337,353,000, a decrease of 2.1% from $347,068,000 in Q1 2024 [31]. Segment Performance - Operating revenues for the Electric segment increased by $8.2 million, or 5.8%, driven by higher fuel recovery revenues and favorable weather conditions [15][17]. - The Manufacturing segment experienced a revenue decline of $17.7 million, or 17.8%, primarily due to a 13% decrease in sales volumes [19]. - The Plastics segment's operating revenues decreased slightly by $0.3 million, or 0.2%, despite a 13% increase in sales volumes [21]. - Total operating revenues for the electric segment reached $149,720 thousand, an increase from $141,488 thousand in the prior year, reflecting a growth of about 5% [34]. - The manufacturing segment reported operating revenues of $81,685 thousand, compared to $99,380 thousand in the previous year, indicating a decrease of approximately 18% [34]. - Net income for the electric segment was $24,708 thousand, up from $22,470 thousand year-over-year, marking an increase of about 10% [34]. Cash Flow and Liquidity - Consolidated cash provided by operating activities was $39.5 million for Q1 2025, down from $71.9 million in Q1 2024 [10]. - For the three months ended March 31, 2025, net cash provided by operating activities was $39,469 thousand, a decrease from $71,913 thousand in the same period of 2024, representing a decline of approximately 45% [33]. - Available liquidity as of March 31, 2025, was $607 million, including cash and credit facilities [12][14]. - Cash and cash equivalents decreased to $284,814,000 from $294,651,000, a decline of about 3.5% [32]. - The cash and cash equivalents at the end of the period were $284,814 thousand, compared to $238,158 thousand at the end of the previous year, representing an increase of approximately 19.6% [33]. - The company experienced a net change in cash and cash equivalents of $(9,837) thousand, contrasting with a positive change of $7,785 thousand in the same period last year [33]. Expenses and Costs - Total Operating Expenses increased slightly to $253,354,000 in Q1 2025 from $252,093,000 in Q1 2024, representing a 0.5% increase [31]. - Electric Production Fuel costs decreased to $14,321,000 in Q1 2025, down 19.5% from $17,694,000 in Q1 2024 [31]. - Electric Purchased Power costs increased significantly to $30,870,000 in Q1 2025, up 37.1% from $22,521,000 in Q1 2024 [31]. - Interest Expense rose to $11,553,000 in Q1 2025, an increase of 17.3% compared to $9,850,000 in Q1 2024 [31]. Assets and Liabilities - Total current assets increased to $651,274,000 from $630,041,000, representing a growth of approximately 3.9% year-over-year [32]. - Total noncurrent assets rose to $3,045,520,000 from $3,022,041,000, reflecting an increase of approximately 0.8% [32]. - Total assets reached $3,696,794,000, up from $3,652,082,000, indicating a growth of about 1.2% [32]. - Current liabilities totaled $248,420,000, compared to $230,990,000, marking an increase of approximately 7.5% [32]. - Short-term debt decreased to $58,853,000 from $69,615,000, a reduction of about 15.5% [32]. - Total noncurrent liabilities and deferred credits amounted to $737,500,073, showing a slight increase from the previous period [32]. - Shareholders' equity increased to $209,370,209 from $194,040,000, representing an increase of approximately 7.9% [32]. - Regulatory assets rose to $11,539,000 from $9,962,000, an increase of about 15.8% [32]. - Goodwill remained stable at $37,572,000 with no change from the previous year [32]. Capital Expenditures - Capital expenditures for Q1 2025 totaled $58.0 million, primarily focused on the Electric segment's projects [11]. - Capital expenditures for the three months ended March 31, 2025, were $58,012 thousand, down from $74,044 thousand in the same period of 2024, a reduction of approximately 22% [33]. Future Outlook - Otter Tail Power expects a compounded annual growth rate in rate base of 9% from 2025 to 2029, aiming for long-term earnings-per-share growth of 6% to 8% [8]. - The company plans to focus on expanding its electric segment and enhancing operational efficiencies to improve future performance [34].