Otter Tail (US:OTTR)2026-02-17 17:02Financial 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, maintaining a strong balance sheet and ample liquidity [20] - The company is initiating its 2026 diluted earnings per share guidance range with a midpoint of $5.42 [6][23] 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] - 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 driven by lower average sales prices [21] Market Data and Key Metrics Changes - The company’s electric rates remained well below the national and regional average, with 2025 residential electric rates being 34% below the national average [13] - The end market demand for the manufacturing segment faced headwinds, particularly in lawn and garden and agriculture sectors [14][15] Company Strategy and Development Direction - The company is committed to a customer-focused growth plan, with a reaffirmed five-year capital spending plan totaling $1.9 billion [24] - The company is increasing investments in renewable generation and battery storage, including a new battery storage project expected to be operational in 2028 [10][24] - The company targets a long-term earnings per share growth rate of 7%-9%, aiming for a total shareholder return of 10%-12% [28] 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 company acknowledged challenges in the manufacturing segment but noted improvements in certain end markets [19][23] - Management highlighted the importance of strategic diversification to provide long-term benefits to customers and investors [29] Other Important Information - The company has a history of uninterrupted dividend payments for 88 consecutive years, with a recent 10% increase in dividends [5] - The company is facing competition from low-cost importers in the plastics segment, impacting pricing and sales [15][27] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded without any inquiries from participants [31][32]