Otter Tail (US:OTTR)2026-02-17 17:00Financial Data and Key Metrics Changes - For the year 2025, the company reported diluted earnings per share of $6.55, a decrease of 9% from the previous year [5][18] - The company ended 2025 with $386 million in cash and a return on equity of 16% [20][22] - The 2026 diluted earnings per share guidance range is set at $5.22-$5.62, with a midpoint indicating a continued above-average return on equity of 12% [23][24] Business Line Data and Key Metrics Changes - Electric segment earnings increased over 7% year-over-year, driven by recovery of increased rate base investments and higher sales volumes [18][19] - Manufacturing segment earnings decreased by 16% year-over-year, primarily due to lower sales volumes and higher SG&A expenses [19] - Plastic segment earnings decreased by 15% year-over-year, largely due to lower average sales prices [20] Market Data and Key Metrics Changes - The company’s electric rates remained 34% below the national average and 19% below regional peers [13] - The residential electric rates are projected to increase between 3% and 4% on a compounded annual growth rate over the current five-year planning period [14] Company Strategy and Development Direction - The company is committed to a customer-focused growth plan, with a five-year capital spending plan totaling $1.9 billion and a projected rate-based compound annual growth rate of 10% [24][25] - The company is pursuing additional investments in renewable generation and battery storage, including a 75 MW battery storage project expected to be operational by 2028 [11][24] - The company aims to maintain its strategic diversification to provide benefits to customers and investors over the long term [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the electric segment's growth, expecting a 14% increase in earnings in 2026 due to higher returns from increased average rate base [21] - The manufacturing segment is anticipated to see a 7% increase in earnings, driven by improved sales outlook [22] - The plastic segment is expected to face challenges, with earnings projected to decrease by 36% in 2026 due to declining average PVC pipe prices [23][27] Other Important Information - The company has a strong balance sheet capable of funding its growth plan without external equity through at least 2030 [20][29] - The company has received approval in Minnesota to add up to 200 megawatts of additional wind generation [25] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded without any inquiries from participants [31][33]