Highlights

  • Otter Tail Corp posted annual EPS of USD 6.55 for 2025, reflecting steady segment performance.
  • Electric segment revenues rose 8.1% in 2025, supported by favorable weather and rate base recoveries.
  • Plastics segment earnings declined 15.1% due to lower sales prices, partially offset by higher volumes.

Otter Tail Corporation (NASDAQ:OTTR) announced its financial results for the year ended December 31, 2025, reporting annual diluted earnings per share (EPS) of USD 6.55 and a consolidated return on equity (ROE) of 16% on an equity ratio of 63%. The company also provided 2026 guidance, projecting diluted EPS in the range of USD 5.22 to USD 5.62 with a mid-point ROE of 12%.

Operating cash flow for 2025 was USD 386.0 million, down from USD 452.7 million in 2024, primarily due to higher working capital requirements and lower earnings. Capital expenditures totaled USD 288.1 million, focusing on Electric segment investments in wind repowering, solar development, and transmission projects. Financing activities included USD 100.0 million in long-term debt issuance and USD 88.1 million in dividend payments. Total available liquidity as of December 31, 2025, was USD 705.5 million.

Electric Segment
The Electric segment recorded operating revenues of USD 566.8 million, an 8.1% increase over 2024, driven by higher fuel recovery revenues, residential and commercial sales volumes, and favorable weather. Net income increased 7.3% to USD 97.6 million. Retail electricity sales rose 4.2%, supported by a 15.1% increase in heating degree days and 11.8% in cooling degree days.

For 2026, Electric segment earnings are expected to increase 14%, supported by a 14% growth in average rate base and interim revenues from rate cases filed in Minnesota and South Dakota. Capital expenditures in the segment are planned at USD 436 million for 2026, focusing on renewable generation, transmission, and distribution projects.

Manufacturing and Plastics Segments
The Manufacturing segment faced lower operating revenues of USD 314.5 million, down 8.2%, primarily due to soft demand across end markets. Net income decreased 15.8% to USD 11.5 million. Fourth-quarter net income improved to USD 2.6 million from a Q4 2024 net loss of USD 0.6 million, supported by higher sales volumes and improved margins.

The Plastics segment reported revenues of USD 422.8 million, down 8.8%, with net income declining 15.1% to USD 170.4 million due to lower average sales prices, partially offset by increased volumes. For 2026, Plastics earnings are projected to decline 36% amid continued price reductions despite higher production capacity at the Phoenix facility.

Corporate Overview and Outlook
Corporate expenses are expected to rise in 2026 due to lower investment income and higher labor costs. Overall 2026 EPS guidance ranges from USD 5.22 to USD 5.62, with the anticipated earnings mix approximately 49% Electric and 51% Manufacturing and Plastics, diverging from the long-term 70% Electric and 30% Non-Electric expectation.

Share performance
Otter Tail Corp shares rose 2.02% 13 Feb, closing at USD 88.16.

With a diversified portfolio and ongoing capital projects across Electric, Manufacturing, and Plastics segments, Otter Tail Corp is projecting moderated earnings for 2026. Market participants are tracking the impact of rate cases, renewable energy investments, and segment-specific price trends as key factors shaping near-term performance.

FAQs

Q1. What is Otter Tail Corp’s 2026 EPS guidance?
The company expects diluted EPS between USD 5.22 and USD 5.62.

Q2. Which segments contribute most to 2026 earnings?
Electric segment is expected at 49% and Manufacturing and Plastics at 51% of total earnings.

Q3. What are the key capital expenditure plans?
Electric segment plans USD 436 million in 2026 for renewable generation, transmission, and distribution projects.