Highlights

  • Second quarter 2026 operating revenues were $334,383 thousand, and the net loss was $7,607 thousand, or $0.18 per diluted share.
  • Legal settlement expenses of $103,500 thousand relate to settlements of the U.S. PVC pipe antitrust class action lawsuits.
  • Segment net income was $18,698 thousand for Electric, $4,571 thousand for Manufacturing and a loss of $30,081 thousand for Plastics.
  • Management initiated 2026 adjusted diluted earnings per share guidance of $5.68 to $6.08, excluding the after-tax legal settlement expense.

Otter Tail Corporation (NASDAQ: OTTR) shares were trading at USD 90.18 on October 27, 2026, up 0.12%, with a relative volume at time of 2.14. The company entered settlement agreements in the U.S. PVC pipe antitrust class action lawsuits on May 28 and June 17, 2026, filed its 2026 Integrated Resource Plan on May 15, 2026, and reported second quarter 2026 results in a Form 10-Q filed on August 5, 2026, with an August 10, 2026 earnings call.

Otter Tail is incorporated in Minnesota and has its principal executive offices in Fergus Falls, Minnesota. It has three reportable segments. Electric is a vertically integrated regulated utility with generation, transmission and distribution facilities serving western Minnesota, eastern North Dakota and northeastern South Dakota. The Manufacturing segment provides metal fabrication for custom machine parts and metal components and manufactures extruded and thermoformed plastic products. The Plastics segment manufactures PVC pipe. The company's fiscal year ends December 31.

Second Quarter Results

For the three months ended June 30, 2026, total operating revenues were $334,383 thousand, compared with $333,043 thousand a year earlier. Electric revenues were $121,320 thousand, and product sales were $213,063 thousand.

Legal settlement expenses were $103,500 thousand, with no such expense a year earlier. Total operating expenses were $358,585 thousand, compared with $235,585 thousand. The operating loss was $24,202 thousand, compared with operating income of $97,458 thousand.

The loss before income taxes was $28,764 thousand. Income tax benefit was $21,157 thousand, including a $26.3 million tax benefit on the litigation settlements. The net loss was $7,607 thousand, compared with net income of $77,728 thousand, and the diluted loss per share was $0.18, compared with diluted earnings per share of $1.85.

Management said on the call that adjusted diluted earnings per share, a non-GAAP measure, were $1.66, compared with $1.85 a year earlier. By segment, net income was $18,698 thousand for Electric, compared with $19,195 thousand, and $4,571 thousand for Manufacturing, compared with $3,481 thousand. The Plastics segment reported a net loss of $30,081 thousand, compared with net income of $53,104 thousand.

PVC Pipe Antitrust Settlements

Putative class actions filed since August 2024, consolidated as In re: PVC Pipe Antitrust Litigation, named Northern Pipe Products, Vinyltech Corporation, Otter Tail Corporation and other manufacturers. On May 28, 2026, the company's subsidiaries agreed to pay $39.5 million to the Direct Purchaser Class and $34.0 million to the Non-Converter Seller Purchaser Class. On June 17, 2026, they agreed to pay $30.0 million to the End-User Class.

The company paid $73.5 million into escrow accounts in the second quarter and $30.0 million in July 2026. The settlements remain subject to final court approval, and the company has termination rights tied to opt-out thresholds. The company stated that the settlements are not an admission of wrongdoing. A putative class action filed in British Columbia in September 2025 remains pending.

Liquidity and Capital

Cash and cash equivalents were $278,383 thousand at June 30, 2026, compared with $386,193 thousand at December 31, 2025. Net cash provided by operating activities for the six months was $182,711 thousand, compared with $159,379 thousand. Available liquidity was $323.0 million under credit facilities, for total available liquidity of $601.4 million with cash. Long-term debt was $1,132,889 thousand.

2026 Outlook

On the call, management initiated adjusted diluted earnings per share guidance of $5.68 to $6.08 for 2026, compared with its original range of $5.22 to $5.62, excluding the after-tax legal settlement expense. It maintained Electric segment guidance assuming a 14% increase in earnings and raised Manufacturing and Plastics guidance. Management now expects the 2026 average PVC pipe sales price to decrease approximately 15% from last year and sales volumes to be softer in the second half.

Management reaffirmed a $1.9 billion five-year capital investment plan and a 10% rate base compound annual growth rate, and said it expects to fund the plan without accessing the equity capital markets.