Otter Tail (US:OTTR)2026-02-17 14:18Financial Performance - Otter Tail Corporation reported annual diluted earnings per share of $6.55 for 2025, with a consolidated return on equity of 16%[12]. - The company initiated 2026 diluted earnings per share guidance in the range of $5.22 to $5.62, targeting a long-term earnings per share growth rate of 7% to 9%[7]. - Net income for the twelve months ended December 31, 2025, is $275,893 thousand, down from $301,662 thousand in 2024[37]. - Net income for the twelve months ended December 2025 was $275,893,000, a decrease of 8.5% from $301,662,000 in 2024[39]. - Total operating revenues for the twelve months ended December 2025 were $1,304,058,000, down 2% from $1,330,548,000 in 2024[40]. - Total current assets increased to $799,725,000 in 2025 from $630,041,000 in 2024, representing a growth of approximately 27%[38]. - Cash and cash equivalents rose to $386,193,000 in 2025, up from $294,651,000 in 2024, indicating a growth of about 31%[38]. - Total assets reached $3,964,279,000 in 2025, compared to $3,652,082,000 in 2024, marking an increase of around 9%[38]. Segment Performance - The Electric segment achieved operating revenues of $566.8 million in 2025, an increase of 8.1% from $524.5 million in 2024[13]. - The Manufacturing segment experienced an 8.2% decline in operating revenues to $314.5 million, driven by a 6% decrease in sales volumes[17]. - The Plastics segment's operating revenues decreased by 8.8% to $422.8 million, primarily due to a 15% decline in average sales prices[19]. - Electric segment operating income increased to $121,549,000 in 2025 from $113,789,000 in 2024, reflecting a growth of 6.9%[40]. - Manufacturing segment reported an operating income of $16,900,000 in 2025, down from $19,092,000 in 2024, a decline of 11.4%[40]. - Plastics segment operating income decreased to $231,079,000 in 2025 from $271,905,000 in 2024, a decline of 15%[40]. Cash Flow and Liquidity - Consolidated cash provided by operating activities decreased to $386.0 million in 2025 from $452.7 million in 2024, primarily due to higher working capital requirements[8]. - Net cash provided by operating activities was $385,985,000 in 2025, down from $452,731,000 in 2024, a decrease of 14.7%[39]. - As of December 31, 2025, Otter Tail Corporation had total available liquidity of $705.5 million, including $386.2 million in cash and cash equivalents[11]. - The company reported a net change in cash and cash equivalents of $91,542,000 for the year, compared to $64,278,000 in 2024, an increase of 42.5%[39]. Capital Expenditures and Investments - Capital expenditures for 2025 were $288.1 million, mainly focused on electric segment projects including wind and solar initiatives[9]. - Total capital expenditures for 2025 are $288 million, with a projected total of $2,050 million from 2026 to 2030[30]. - The capital expenditure plan includes investments in solar and battery storage resources, transmission, and distribution assets[30]. Future Projections - The company expects Electric segment earnings to increase by 14% in 2026, while Manufacturing segment earnings are projected to rise by 7%[29]. - The Plastics segment is anticipated to see a 36% decline in earnings for 2026, reflecting ongoing challenges in pricing and market conditions[29]. - The Electric segment's average rate base is expected to grow from $2,108 million in 2025 to $3,423 million in 2030, reflecting an annual growth rate of 10%[30]. - The company expects a 14% increase in average rate base in 2026, contributing to revenue growth[33]. - Sales volumes of horticulture products are expected to increase due to improved end market conditions[33]. - Continued decline in average product sales prices is anticipated throughout 2026, as pricing recedes from the high point in 2022[33]. Asset and Liability Changes - Total noncurrent assets increased to $3,164,554,000 in 2025 from $3,022,041,000 in 2024, reflecting a growth of approximately 5%[38]. - Current liabilities decreased to $350,995,000 in 2025 from $390,790,000 in 2024, showing a reduction of about 10%[38]. - Long-term debt stood at $963,566,000 in 2025, compared to $943,734,000 in 2024, representing an increase of approximately 2%[38]. - Regulatory assets increased significantly to $20,437,000 in 2025 from $9,962,000 in 2024, indicating a growth of approximately 105%[38]. - Inventories rose to $158,598,000 in 2025 from $148,885,000 in 2024, reflecting an increase of about 7%[38]. - Other noncurrent assets increased to $80,770,000 in 2025 from $66,416,000 in 2024, showing a growth of approximately 21%[38].