OTTR

Image source: The Motley Fool. Monday, Aug. 3, 2026 at 10:00 a.m. ET Manager of Investor Relations - Beth Eiken CEO - Chuck MacFarlane President - Tim Rogelstad Vice President and CFO - Tyler Nelson Operator: Good morning, and welcome to Otter Tail Corporation's Second Quarter 2026 Earnings Conference Call. Today's call is being recorded. [Operator Instructions] I will now turn the call over to the company for their opening comments. Beth Eiken: Good morning, and welcome to our second quarter 2026 earnings conference call. My name is Beth Eiken, and I'm Otter Tail Corporation's Manager of Investor Relations. Last night, we announced our Q2 financial results. Our complete earnings release and slides accompanying this call are available on our website at ottertail.com. A recording of this call will be available on our website later today. With me on the call today are Chuck MacFarlane, Otter Tail Corporation's CEO; Tim Rogelstad, Otter Tail Corporation's President; and Tyler Nelson, Otter Tail Corporation's Vice President and CFO. Before we begin, I want to remind you that we will be making forward-looking statements during the course of this call. As noted on Slide 2, these statements represent our current views and expectations of future events. They are subject to risks and uncertainties, which may cause actual results to differ from those presented here. So please be advised against placing undue reliance on any of these statements. Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review. We will be referencing certain adjusted financial measures or non-GAAP measures throughout this call, including adjusted net income, adjusted earnings per share and adjusted return on equity. For more information, please refer to our quarterly earnings release and the non-GAAP reconciliations included in the appendix of our earnings presentation. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments or otherwise. I will now turn the call over to Otter Tail Corporation's CEO, Mr. Chuck MacFarlane. Chuck MacFarlane: Thanks, Beth. Good morning, and welcome to our second quarter earnings call. Please refer to Slide 4 as I begin my remarks with a summary of quarterly highlights. Our team advanced our strategic initiatives during the second quarter, delivering on near-term priorities for the benefit of our customers and shareholders. Otter Tail Power continues to execute on our regulatory agenda. We secured route permits for two of our large regional transmission projects, marking an important milestone in the development of these reliability-driven investments. We also filed our 15-year Integrated Resource Plan with the Minnesota Public Utilities Commission. The IRP outlines our preferred plan for meeting our Minnesota customers' future capacity and energy needs. We believe the requested resources will position us well to continue delivering low-cost, reliable electric service. Our Manufacturing and Plastics segment team members successfully capitalized on opportunities for higher sales volumes from the additional capacity recently added at our Georgia and Arizona facilities. Slide 5 provides a summary of our financial results. We produced adjusted diluted earnings per share of $1.66 compared to $1.85 last year. The expected decrease in earnings was primarily driven by Plastics segment performance as the average sales price of our PVC pipe continued to recede. We are initiating an adjusted diluted earnings per share guidance range of $5.68 to $6.08, which excludes the after-tax impact of the PVC pipe legal settlement. This reflects an increase from our original 2026 earnings guidance range of $5.22 to $5.62. Following my operational update, Tyler will provide a detailed discussion of our adjusted quarterly financial results and the outlook for the remainder of the year. Transitioning now to my operational update for Otter Tail Power beginning on Slide 7. During the second quarter, we, along with other parties to the Minnesota rate case, requested to extend the procedural schedule to provide more time to respond and review discovery requests. The Minnesota Commission approved the request and the revised procedural schedule is presented on the slide. We submitted our rebuttal testimony late last month. In the filing, we amended our requested net revenue increase to $42.3 million from $44.8 million due to an updated test year information. Our team continues to work towards reaching a constructive outcome. Separately, we are finalizing our annual cost of service analysis and we'll evaluate if a rate case filing is warranted in any of our other jurisdictions. Turning to Slide 8. We filed our 15-year Integrated Resource Plan with the Minnesota Commission in May. Our preferred plan recommends adding a 50-megawatt natural gas facility in 2031 or 2032, a 50-megawatt wind facility in 2035 and another 50-megawatt wind facility in 2040. Our preferred plan also reflects the completion of the projects currently under development or construction from our previously approved resource plan. We expect a hearing and a final order on the IRP in Q2 of 2027. Turning to Slide 9. We are reaffirming our 5-year rate base compounded annual growth rate of 10% and continue to expect Otter Tail Power's earnings to grow at a similar rate over the planning period. We remain confident in our ability to deliver on our growth plan. We are focused on project execution in an effort to minimize development risk and manage construction time lines and costs. As a reminder, our plan is not dependent on securing a large load, and this remains an incremental opportunity to what is already a robust plan. Slides 10 and 11 provide an overview of ongoing and future capital projects. Our 2 solar projects are under construction and are progressing well. We anticipate Solway Solar becoming operational in the first half of 2027 and Abercrombie Solar in 2028. Our battery storage project remains under development, and we continue to target bringing this storage facility online in 2028. Development work also continues on our large regional transmission projects. We secured route permits for both of our MISO Tranche 1 345 kV projects during the second quarter with the 2 transmission lines spanning nearly 200 miles in total. Turning to Slide 12. Otter Tail Power remains well positioned to attract and support large loads. We continue to engage with a diverse set of companies interested in adding new loads to our system. Phase 1 of our pipeline increases by approximately 350 megawatts and now totals 1,400 megawatts. Approximately 35% of the total load opportunity relates to a data center with the remaining megawatts relating to clean fuel and thermal storage. The diversity of our pipeline is a strength as each load has different needs. For example, the clean fuel and thermal storage opportunities are interruptible, giving us flexibility while still providing an opportunity for significant growth. Additionally, our team filed large load tariffs with the Minnesota, North Dakota and South Dakota commissions during the second quarter. The tariff structure are structured with our existing customers and shareholders in mind, including long-term contract periods and required financial guarantees to avoid stranded costs. Any costs associated with the new large loads would be directly assigned to the new customer and a portion of our fixed costs would be allocated to the new load. This allocation would produce a rate credit for existing customers as we are able to distribute our fixed costs across a larger customer base. Providing low-cost electric service to our customers has been and always will be a priority of ours. As Slide 13 illustrates, Otter Tail Power's electric rates have remained well below the national and regional average for many years, and we remain committed to managing customer bill increases. Looking ahead, we project bills to increase between 3% and 4% on a compounded annual growth rate over the current 5-year planning period. This is made possible by MISO system-wide recovery for our transmission investments, the availability of renewable energy tax credits, reduced energy purchases and other factors as well as thoughtful planning and effective project execution. Transitioning to our manufacturing platform. Slide 15 provides an overview of the industry conditions impacting Manufacturing segment volumes. Industry conditions are improving in many of the end markets we serve. Our team is well positioned to respond to the increase in demand and effectively leverage the added capacity in Georgia. The recreational vehicle and lawn and garden end markets have largely stabilized and our horticulture end market remains stable. The construction end market continues to improve as our OEM customers are seeing an increase in demand for their products. The industrial end market remains strong as the products we manufacture are used to support the growing energy demand. In contrast, agriculture industry conditions remain challenging due to the weak farm economy with elevated costs, lower relative commodity prices and ongoing trade disruption. Slide 16 provides an overview of our Plastics segment pricing and volume trends. The average sales price of our PVC pipe continued to decline during the second quarter from the same time last year, but at a slower rate, decreasing by 14%. Sales volumes increased 15% from the same time last year, surpassing our expectations for the quarter. As we shared during our Q1 earnings call, we believe our customers sought to secure additional PVC pipe in advance of announced resin price increases. Our team did an excellent job responding to the pull forward in demand, effectively leveraging the expanded capacity at our Phoenix facility and selling more pipe during Q2 than any quarter before. Separately, we entered into settlement agreements with the 3 classes in the U.S. PVC pipe antitrust litigation during the second quarter, and the court has preliminarily approved these agreements. If final approval is granted by the court in Q4, the settlement agreements will resolve all claims arising from these classes. While not admitting any wrongdoing, fault or liability, we agreed to pay $103.5 million to resolve the litigation and concluded settling was in the best interest of the company and our shareholders. The settlements meaningfully reduced the uncertainty, distraction and significant costs and exposure associated with complex antitrust litigation and most importantly, allows our team members to remain focused on what we do best, serving our customers. With that, I will now turn it over to Tyler to provide his financial update. Tyler Nelson: Thanks, Chuck, and good morning, everyone. Turning to Slide 18. We generated adjusted diluted earnings per share of $1.66 during the second quarter, a 10% decrease from the same time last year. The expected decline in earnings was primarily from our Plastics segment as we continue on the glide path to earnings levels more in line with our long-term expectations. In addition, corporate costs were higher in the period. As a reminder, our adjusted results exclude the after-tax impact of the legal settlement charges recognized in the second quarter, which amounted to $1.84 per share. Please follow along on Slides 19 and 20 as I provide an overview of our second quarter results by segment. Electric segment earnings decreased slightly from the same time last year. We benefited from higher electric rates from recent rate case activity, including interim rates in Minnesota and final rates in South Dakota. In addition, the timely recovery of our rate base investments, net of the incremental depreciation and financing costs positively impacted our quarterly results. Finally, we also benefited from increased commercial and industrial sales volumes during the period. As expected, operating and maintenance costs were higher in the second quarter compared to last year, largely from the planned outage at one of our coal facilities and the timing of vegetation management expenses. Higher labor costs in 2026 also contributed to higher O&M expense in the period. Manufacturing segment earnings increased $0.03 per share or 38%. This increase was primarily driven by higher margins due to a favorable product mix. Our strategy of providing value-added service to our customers through our full suite of fabrication capabilities provides margin expansion opportunities. Beyond product mix, increased sales volumes within the construction, recreational vehicle and horticulture end markets also contributed to our quarterly results. Partially offsetting these items were higher operating costs in the business, including from performance-based compensation. Turning to Slide 20. Adjusted Plastics segment earnings decreased $0.14 per share or 11%, primarily due to lower pipe sales prices, partially offset by higher sales volumes. These adjusted financial results outpaced our expectations. While the average sales price of our PVC pipe continues to recede, the rate of decline moderated during the second quarter due to the strong demand for our products. Corporate costs increased $0.07 per share, primarily due to the internal allocation of interim tax expense and an increase in employee compensation costs. Turning to Slide 21. We continue to be in a position of financial strength. Our equity layer as a percentage of total capital was 60% at the end of June, and we had over $600 million of available liquidity, including $278 million of cash and cash equivalents. It is the strength of our balance sheet that allows us to fund our current rate base growth plan without any external equity needs. On Slide 22, we are initiating an adjusted diluted earnings per share guidance range of $5.68 to $6.08. This range excludes the after-tax impact of the legal settlement expense recognized in the second quarter. We are maintaining our electric segment guidance, which assumes a 14% increase in earnings from the prior year, driven by robust rate base growth and increased electric rates. We are increasing our Manufacturing segment guidance as end market demand continues to improve. We anticipate sales volumes to be higher in the second half of the year than originally anticipated. Additionally, we expect margins to be higher than originally forecasted due to improved price realization and a greater leveraging of our fixed costs. We are also increasing our Plastics segment guidance as we delivered better-than-forecasted financial results on an adjusted basis during the second quarter and revised our PVC pipe pricing expectations for the remainder of the year. Due to the strong demand for our products, the average sales price of our PVC pipe increased sequentially from the first quarter of the year to the second. While we do not expect this trend to continue through the remainder of the year, we are adjusting the rate of decline assumed in our guidance. We now expect our 2026 average sales price to decrease approximately 15% from last year's average. Our annual sales volume assumption remains largely unchanged. We continue to believe that our customers pulled forward their orders in Q2 to secure pipe before the announced PVC resin price increases. As a result, we now expect sales volumes to be softer in the second half of the year, but annual volumes remain largely the same. Finally, we expect our corporate costs to increase from what we had originally assumed for the year. This is largely driven by lower investment income and a reduced tax benefit. Both of these items are driven by the litigation settlements from a lower expected investment balance and a change in our anticipated state tax rate. On Slide 23, we are reaffirming our 5-year capital investment plan. Otter Tail Power's $1.9 billion customer-focused investment plan will be the primary driver of growth over this planning period. We are focused on project execution to deliver quality investments for the benefit of our customers and shareholders. Slide 24 summarizes our financing plan, which remains unchanged. We continue to expect to fund our customer-focused growth plan without needing to access the equity capital markets. At Otter Tail Power, we expect to issue debt periodically to maintain our authorized capital structure and support our rate base growth plan. At the parent level, we have $80 million of debt maturing in the fourth quarter, which we continue to plan to retire and not replace. Upon retirement, the only outstanding debt will be at Otter Tail Power. On Slide 25, we are reaffirming our expected long-term Plastics earnings profile. We believe segment earnings will continue to decline through the end of 2027 and expect earnings in 2028 to be within a range of $45 million to $50 million. Due to seasonality and other factors, the rate of pricing decline can vary from period to period. Additionally, it continues to be difficult to predict with certainty long-term Plastics segment earnings. The timing or level of earnings could vary materially from our projection. However, our Plastics segment continues to be an important component to our overall strategy. Even as earnings recede, we expect the segment to produce an accretive return and incremental cash that we can use to reinvest into our utility-first model. Slide 26 summarizes our investment targets. Our long-term earnings per share growth rate target is 7% to 9%, resulting in a total shareholder return of 10% to 12%. We anticipate delivering on these targets once Plastics segment earnings normalize in 2028. As we continue to execute on our customer-focused growth plan, we are well positioned to deliver on our investment targets over the long term. Otter Tail Power continues to be a best-in-class utility, producing attractive returns for our shareholders while providing some of the lowest cost electric service to our customers. Our manufacturing and plastic pipe businesses consistently produce accretive returns and incremental cash, enabling us to fund our rate base growth plan without any external equity needs. It is this intentional strategic diversification that has and will continue to provide benefits to our customers and investors over the long term. We are now ready to take your questions. Operator: [Operator Instructions] Our first question comes from the line of Tate Sullivan of Maxim Group. Tate Sullivan: Just to start and I'll get to the PVC settlement as well as a Manufacturing business. I think historically, you've pointed to a net profit margin of 5% to 7% range in that business. Is that -- I mean, are you -- can you comment on that going forward given the strength in the U.S. PMI recently and other considerations, please? Tyler Nelson: Yes. That's where we're tracking currently. If you look, say, at our first 6 months of the year, it would be at about a 5% net income return. We do think there's opportunity to improve on that with increased volumes, providing increased leveraging of our fixed costs along with operating efficiencies, production and productivity gains in the business. But yes, generally, that's where we're reading out currently. Tate Sullivan: And in terms of the manufacturing capacity footprint of BTD currently, I mean, are you operating close to that capacity level? Or do you still have room to grow as well? Tyler Nelson: We would still have room to grow. We recently expanded our facility in Georgia. So there is definitely room in that facility for additional growth, and that's -- that was a targeted investment and that's where we see growth from our existing customers in that part of the U.S. Tate Sullivan: Okay. And shifting to the PVC business too, and you've previously announced to meet most of these settlements and then adjusted the guidance today. Does it change the pricing dynamic with the distributors going forward? Was the relationship with customers part of the consideration of settling? If you can comment on those questions, please? Chuck MacFarlane: Tate, this is Chuck. It does not change any pricing or relationship with the customers. We don't view that, that will change in any way based on the settlement. Tate Sullivan: Okay. And then I mean, as one way to look at the settlements is looking at taking out the $100-odd million from the historical net income in the PVC business, and that's sort of the adjusted pricing where pricing would have been? Or is that an incorrect way to look at the settlements? Chuck MacFarlane: Yes. We don't know. We can't make that determination. Tate Sullivan: Okay. And then last, did you say during the comments, too, that the payment potentially, depending on the court approval, potentially made all 3 payments in the fourth -- by the end of the year? Is that the right way to look at timing for the cash? Tyler Nelson: Tate, this is Tyler again. So we -- by the end of July, we had actually made the full payment of $103.5 million into an escrow account that will reside in that escrow account until final court approval is provided. The amounts that were paid in escrow remain on our balance sheet. So you'll see when we file our 10-Q, we'll show a restricted cash amount of -- it's $73 million because that's what we had paid by the end of June. We then paid the remaining $30 million at the end of July. So those funds as of today are sitting in an escrow account that we don't have access to until the final court approval is received. Operator: Our next question comes from the line of Michael Pelletier of KeyBanc. Michael Pelletier: Just on the large load pipeline, included meaningful additions this quarter. Just curious on what's driving the step-up. And then to what extent are customers increasingly looking to your service territory as alternative regions face interconnection constraints and moratoriums? Timothy Rogelstad: Sure. Michael, this is Tim. And so we continue to see a lot of activity on the large load front. I think as Chuck indicated, one of the things we really like is the diversity that we're seeing both from data centers as well as clean fuel and also similar to our new customer down at our Big Stone plant that is a thermal storage facility. And so we continue to see a lot of activity there. When you think about big facilities like this, we certainly see feedback from -- in our region, both negatively and positively. I think it really depends upon where you're at in our system. We've got a large geography. So we've got a lot of places to put some of these loads. But we continue to work with the different -- whether at a state level or at a local township level with different entities to try to help facilitate some of these large load additions. Michael Pelletier: Okay. And then just on the timing and cadence of the capital investments contemplated in the IRP, I guess, specifically with the natural gas gen. Would this be incremental to the $750 million opportunity? And then when could you see those opportunities begin to materialize? Timothy Rogelstad: Yes. So it is incremental to what we've identified already as our $750 million of incremental as well. So we'll work through the IRP process, and we would anticipate by the end of the second quarter next year, we'll have clarity whether or not we get approval. With respect to execution, that is certainly a bigger challenge these days with respect to supply chain, in particular, natural gas generators. So as we target a 2031, 2032 in service, we would anticipate we get approval next year, we would begin activities in the development of that. And potentially late in the 5-year look, we would see investment opportunities starting to show up. Operator: As there are no remaining questions in the queue, I will turn the call back over to Chuck for his closing remarks. Chuck MacFarlane: Thank you for joining our call and your interest in Otter Tail Corporation. If you have any questions, please reach out to our Investor Relations team, and we look forward to speaking with you next quarter. Operator: Thank you for your participation in today's conference. This does conclude the program. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 10% decline in adjusted EPS primarily to the Plastics segment as PVC pipe sales prices continued to recede from historic highs. The Manufacturing segment outperformed expectations due to a favorable product mix and value-added fabrication services that provided margin expansion opportunities. Plastics segment volumes reached record quarterly levels as customers pulled forward orders to secure inventory ahead of announced resin price increases. The company reached a $103.5 million settlement to resolve all claims in the U.S. PVC pipe antitrust litigation, prioritizing the removal of legal uncertainty and distraction. Electric segment performance was supported by higher rates from interim Minnesota and final South Dakota rate cases, alongside increased commercial and industrial sales volumes. Strategic positioning remains focused on a 'utility-first' model, using accretive cash flows from manufacturing and plastics to fund a robust $1.9 billion utility capital plan. Full-year 2026 adjusted EPS guidance was raised to a range of $5.68 to $6.08, reflecting improved demand in manufacturing and a slower-than-expected decline in PVC pricing. The 15-year Integrated Resource Plan (IRP) proposes adding 50 MW of natural gas in 2031-2032 and 100 MW of wind capacity by 2040 to meet future energy needs. Management expects Plastics segment earnings to continue a downward 'glide path' through 2027 before normalizing at a range of $45 million to $50 million in 2028. The 5-year utility rate base is projected to grow at a 10% CAGR, supported by regional transmission projects and solar developments without requiring external equity. Second-half 2026 Plastics volumes are expected to be softer following the Q2 pull-forward, though annual volume assumptions remain largely unchanged. The $103.5 million PVC pipe antitrust settlement resulted in a $1.84 per share after-tax charge in the second quarter. Corporate costs are expected to rise due to lower investment income following the $103.5 million cash outflow into escrow for the legal settlement. Agriculture industry conditions remain a headwind for the Manufacturing segment due to weak farm economy metrics and lower commodity prices. The company plans to retire $80 million of maturing parent-level debt in Q4 2026 without replacement, leaving all remaining debt at the utility level. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed they are tracking toward a 5% to 7% net profit margin range for the Manufacturing business. There is still room for growth within the existing footprint, particularly at the recently expanded Georgia facility which was a targeted investment for regional customer growth. CEO Chuck MacFarlane stated the settlement does not change the pricing dynamics or the company's relationships with its distributors. Management declined to speculate on whether the settlement amount reflects a historical overcharge or 'adjusted' pricing level. The pipeline grew to 1,400 MW, driven by a diverse mix of data centers (35%), clean fuel, and thermal storage opportunities. Management noted that the interruptible nature of clean fuel and thermal storage loads provides the utility with operational flexibility while driving growth. The proposed natural gas and wind facilities in the IRP are incremental to the previously identified $750 million in growth opportunities. Investment for the natural gas facility could begin appearing late in the current 5-year planning window, pending regulatory approval in Q2 2027.

Interested in Otter Tail Corporation? Here are five stocks we like better. Otter Tail raised its full-year adjusted EPS guidance to $5.68–$6.08, despite second-quarter adjusted EPS falling to $1.66 from $1.85 as lower PVC pipe prices pressured the plastics segment. The plastics business saw PVC pipe volumes rise 15%, but average selling prices fell 14% year over year. Otter Tail also agreed to a $103.5 million PVC antitrust litigation settlement, with a $1.84 per-share after-tax impact excluded from adjusted results. Utility growth initiatives advanced, including permits for two major transmission projects and an expanded large-load pipeline reaching 1,400 MW. The company reaffirmed its 10% five-year utility rate-base growth target, while manufacturing guidance improved on stronger expected volumes and demand. Otter Tail (NASDAQ:OTTR) reported second-quarter adjusted diluted earnings per share of $1.66, down from $1.85 a year earlier, as lower PVC pipe pricing weighed on its plastics segment. The company raised its full-year adjusted earnings guidance to a range of $5.68 to $6.08 per share, excluding the after-tax effect of a legal settlement related to PVC pipe antitrust litigation. Chief Executive Officer Chuck MacFarlane said the company advanced utility regulatory and infrastructure initiatives during the quarter while its manufacturing and plastics businesses benefited from higher sales volumes. The updated guidance compares with Otter Tail's original 2026 adjusted EPS outlook of $5.22 to $5.62. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Otter Tail's adjusted plastics segment earnings fell $0.14 per share, or 11% from a year earlier, primarily because PVC pipe selling prices declined. The average PVC pipe sales price was down 14% year over year during the second quarter, although the rate of decline moderated, according to management. Sales volumes increased 15% and exceeded the company's expectations. MacFarlane said customers appeared to have purchased additional pipe ahead of announced PVC resin price increases. Otter Tail responded by using added capacity at its Phoenix facility, selling more pipe in the quarter than it had in any prior quarter, he said. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? For the full year, Otter Tail now expects average PVC pipe prices to decline about 15% from the 2025 average. It expects softer volumes in the second half following the second-quarter order pull-forward, though its full-year volume assumption is largely unchanged. The company raised its plastics guidance after second-quarter adjusted results surpassed its expectations and after it revised pricing assumptions for the balance of the year. Chief Financial Officer Tyler Nelson said average PVC pipe prices increased sequentially from the first quarter to the second quarter amid strong demand, though the company does not expect that trend to continue through the rest of 2026. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Otter Tail entered settlement agreements with three classes in U.S. PVC pipe antitrust litigation during the quarter. The court has preliminarily approved the agreements, and the company expects final approval in the fourth quarter. Without admitting wrongdoing, fault or liability, Otter Tail agreed to pay $103.5 million to resolve the litigation. The settlement charge had an after-tax impact of $1.84 per share and was excluded from adjusted results and updated guidance. Nelson said the company had deposited the full $103.5 million into an escrow account by the end of July. The funds remain on Otter Tail's balance sheet until final court approval, at which point the company will no longer have access to them. MacFarlane said the settlement would not change the company's pricing dynamics or customer relationships. He said resolving the claims reduced uncertainty, distraction, costs and exposure associated with the litigation. Otter Tail Power secured route permits for both of its MISO Tranche 1 345-kilovolt transmission projects during the second quarter. The two reliability-focused transmission lines span nearly 200 miles in total. The company also said its Solway Solar project remains on track for operation in the first half of 2027, while Abercrombie Solar is targeted for 2028. Its battery storage project is also targeted for a 2028 in-service date. The utility filed a 15-year integrated resource plan with the Minnesota Public Utilities Commission in May. Its preferred plan includes a 50-megawatt natural gas facility in 2031 or 2032, followed by 50-megawatt wind facilities in 2035 and 2040. The company expects a hearing and final order on the plan in the second quarter of 2027. President Tim Rogelstad said the natural gas project would be incremental to the company’s previously identified $750 million of incremental investment opportunities. If approved, development work could begin next year, with investment potentially appearing late in the company’s current five-year planning period. Otter Tail reaffirmed its expected five-year rate base compound annual growth rate of 10% and said it expects utility earnings to grow at a similar rate. Its $1.9 billion customer-focused utility capital plan remains unchanged. The company’s phase-one large-load pipeline increased by about 350 MW to 1,400 MW. About 35% of the opportunity is associated with a data center, while the balance is tied to clean fuel and thermal-storage projects. Management said it filed large-load tariffs in Minnesota, North Dakota and South Dakota designed to require long-term contracts and financial guarantees and to directly assign new-load costs to the new customers. Manufacturing segment earnings increased $0.03 per share, or 38%, driven by favorable product mix and increased sales volumes in construction, recreational vehicle and horticulture markets. Higher operating costs, including performance-based compensation, partly offset those gains. Otter Tail raised manufacturing guidance, citing improving end-market conditions, stronger expected second-half volumes, improved price realization and better absorption of fixed costs. Nelson said the manufacturing business generated about a 5% net income return during the first six months and that management sees potential for improvement through higher volumes, efficiencies and productivity gains. The company said it has additional capacity available at its Georgia manufacturing facility following a recent expansion. Management described recreational vehicle and lawn-and-garden demand as largely stabilized, construction demand as improving and industrial demand as strong, while agricultural conditions remained challenging because of elevated costs, lower relative commodity prices and trade disruption. Otter Tail ended June with an equity layer equal to 60% of total capital and more than $600 million in available liquidity, including $278 million of cash and cash equivalents. Nelson said the company expects to fund its current rate-based growth plan without issuing external equity. It also plans to retire, rather than refinance, $80 million of parent-level debt maturing in the fourth quarter. Otter Tail Corporation, through its primary subsidiary Otter Tail Power Company, is a regulated electric utility engaged in the generation, transmission and distribution of electricity. The company operates a diversified portfolio of owned and contracted power generation facilities, including coal, natural gas, wind and hydroelectric units, supplemented by long-term power purchase agreements. In addition to utility operations, Otter Tail provides related engineering, construction and maintenance services to support grid reliability and efficiency. The company's service territory covers a predominantly rural footprint in the Upper Midwest, including communities in west-central Minnesota, eastern North Dakota, northwest Wisconsin and small portions of South Dakota. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Otter Tail Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Otter Tail (OTTR) came out with quarterly earnings of $1.66 per share, beating the Zacks Consensus Estimate of $1.48 per share. This compares to earnings of $1.85 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +12.16%. A quarter ago, it was expected that this power company and manufacturer would post earnings of $1.34 per share when it actually produced earnings of $1.73, delivering a surprise of +29.1%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Otter Tail, which belongs to the Zacks Utility - Electric Power industry, posted revenues of $334.38 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.04%. This compares to year-ago revenues of $333.04 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Otter Tail shares have added about 9.4% since the beginning of the year versus the S&P 500's gain of 9.4%. While Otter Tail has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Otter Tail was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.43 on $318 million in revenues for the coming quarter and $5.54 on $1.3 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Utility - Electric Power is currently in the bottom 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Consolidated Edison (ED), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This utility is expected to post quarterly earnings of $0.74 per share in its upcoming report, which represents a year-over-year change of +10.5%. The consensus EPS estimate for the quarter has been revised 6.8% higher over the last 30 days to the current level. Consolidated Edison's revenues are expected to be $3.74 billion, up 4.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Otter Tail Corporation (OTTR) : Free Stock Analysis Report Consolidated Edison Inc (ED) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

FERGUS FALLS, Minn., August 03, 2026--(BUSINESS WIRE)--Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter ended June 30, 2026. SUMMARY Reported quarterly diluted loss per share of $0.18 and adjusted diluted earnings per share of $1.66. Updated our annual diluted earnings per share guidance range to $3.84 to $4.24. Initiated annual adjusted diluted earnings per share guidance range of $5.68 to $6.08. CEO OVERVIEW "Our team advanced our strategic initiatives during the quarter and delivered on our near-term priorities and growth plan for the benefit of our customers and shareholders," said CEO Chuck MacFarlane. "I am grateful for their efforts in what was a very busy quarter and for the ways they continue to support our customers. "Otter Tail Power’s team members continue to execute well on our regulatory and strategic priorities. During the second quarter, we secured route permits for two of our large regional transmission projects, filed our 15-year integrated resource plan with the Minnesota commission and continued to make progress on our ongoing Minnesota rate case. "Our Manufacturing segment produced improved financial results, primarily driven by a favorable product mix as our team continues to focus on providing value-added service to customers, creating margin expansion. Sales volumes also increased as our businesses were well positioned to capitalize on improved demand, especially in the recreational vehicle, construction and horticulture end markets. "Our Plastics segment outperformed our expectations, driven by strong sales volumes as our customers sought to secure PVC pipe in advance of announced resin price increases. Additionally, the rate of decline in the sales price of our PVC pipe moderated in a strong demand environment. Our team effectively leveraged the additional capacity recently added at our Phoenix facility to fulfill customer demand. "During the second quarter, we entered into settlement agreements with the three putative classes in the PVC pipe U.S. antitrust litigation. If final approval is granted by the court, the settlement agreements will resolve all claims arising from these putative classes. While not admitting any wrongdoing, fault or liability, we agreed to pay $103.5 million to resolve the class action litigation. We concluded resolution through settlements was in our best interest as it meaningfully reduces the uncertainty, distraction and significant costs and exposure associated with complex antitrust litigation, and allows our team members to remain focused on what we do best - serving our customers. "We are updating our 2026 diluted earnings per share guidance range to $3.84 to $4.24 from $5.22 to $5.62 primarily due to the impact of the settlement agreements and related expense. We are initiating an adjusted diluted earnings per share guidance range of $5.68 to $6.08 which excludes the after-tax impact of the litigation settlement expense and reflects an increase from our original guidance range. "The fundamentals of our diversified business model remains strong, and we are well positioned to deliver on our investment targets over the long term. We continue to target a long-term earnings per share growth rate of 7 to 9 percent and a total shareholder return of 10 to 12 percent." QUARTERLY DIVIDEND On August 3, 2026, the corporation’s Board of Directors declared a quarterly common stock dividend of $0.5775 per share. This dividend is payable on September 10, 2026 to shareholders of record on August 14, 2026. CASH FLOWS AND LIQUIDITY Our consolidated cash provided by operating activities for the six months ended June 30, 2026 was $182.7 million compared to $159.4 million for the six months ended June 30, 2025. This increase was primarily due to a decrease in working capital requirements, largely driven by the timing of vendor payments and the recovery of fuel cost and rider revenues from our utility customers. Investing activities for the six months ended June 30, 2026 included capital expenditures of $324.8 million. Our capital investments were largely within our Electric segment and included investments in our Abercrombie and Solway solar projects, as well as investments in our wind repowering and other projects. Financing activities for the six months ended June 30, 2026 included the issuance of $170.0 million of long-term debt by Otter Tail Power; the proceeds of which were used to repay short-term borrowings, fund capital investments and support operating activities. Financing activities for the period also included dividend payments of $48.5 million. As of June 30, 2026 we had $170.0 million and $153.0 million of available liquidity under our Otter Tail Corporation and Otter Tail Power credit facilities, respectively, along with $278.4 million of available cash and cash equivalents, resulting in total available liquidity of $601.4 million. SEGMENT PERFORMANCE The following table shows heating degree days and cooling degree days as a percent of normal. The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kilowatt-hour (kwh) sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the three months ended June 30, 2026 and 2025. Operating Revenues decreased $7.4 million primarily due to an increase in the amount of production tax credits (PTCs) generated during the period, the benefit of which is passed through to customers, as well as lower fuel recovery revenues. The increase in PTCs was driven by additional wind generation and the completion of our wind repowering projects earlier this year, which allowed the facilities to begin generating PTCs as they were placed back into service. A planned outage at one of our coal-fired plants during the period drove the reduction in fuel recovery revenues and also resulted in less excess generation, which resulted in lower wholesale revenues. Lower market energy prices resulted in lower purchased power costs which also contributed to the decrease in fuel recovery revenues. The decreases described above were partially offset by the impact of increased interim and final rates in Minnesota and South Dakota, respectively, the recovery of additional rate base investments, increased commercial sales volumes, and favorable weather impacts. Net Income decreased $0.5 million primarily due to higher operating and maintenance expenses, including plant outage-related expenses, increased labor costs, and increased vegetative management expenses, as well as higher depreciation and interest expense associated with our rate base investments. An increase in allowance for funds used during construction, driven by our continued investments in our large solar projects, partially offset the impact of lower revenues and higher operating and maintenance expenses. Operating Revenues increased $9.7 million primarily due to steel cost increases, which drove a 9% revenue increase, as steel costs are passed on to customers, as well as a 3% increase in sales volumes. Demand improved in certain markets we serve, including the construction, recreational vehicle and horticulture markets, compared to softer demand and tighter inventory management efforts during the same period last year. Net Income increased $1.1 million primarily due to higher margins resulting from the mix of products sold and higher sales volumes, which results in a greater leveraging of our fixed costs. These impacts were partially offset by higher general and administrative expenses. Operating Revenues decreased $1.0 million compared to the same period last year, primarily due to a 14% decrease in average sales prices. The impact of lower pricing was largely offset by a 15% increase in sales volumes, primarily driven by customer purchasing activity ahead of announced PVC resin cost increases and additional production capacity recently added at our Phoenix facility. Net Income decreased $83.2 million, resulting in a net loss for the quarter. The decrease was primarily due to estimated losses recognized during the period arising from the settlement agreements reached with each of the three putative classes in the ongoing U.S. antitrust class action lawsuits. In connection with these matters, we recognized an estimated pre-tax loss in the amount of $103.5 million during the period. Adjusted Net Income reflects an adjustment to exclude the after-tax impact of the legal settlement expenses recognized in the second quarter of 2026. Adjusted net income decreased $6.0 million from the second quarter of 2025 primarily due to decreased sales prices, partially offset by increased sales volumes, as discussed above. For the three months ended June 30, 2026, corporate results reflected a net loss of $0.8 million compared to net income of $1.9 million for the same period last year. The change from the prior year was primarily due to the internal allocation of interim tax expense and an increase in employee compensation costs. 2026 OUTLOOK We are updating our 2026 diluted earnings per share guidance to a range of $3.84 to $4.24 and initiating our 2026 adjusted diluted earnings per share guidance in the range of $5.68 to $6.08. The segment components of our 2026 guidance compared with actual earnings for 2025 are as follows: The following items contribute to our 2026 earnings guidance: Electric Segment - We are maintaining our segment earnings guidance. Manufacturing Segment - We are increasing our segment earnings guidance based on: Higher sales volumes in the second half of the year due to improved end market demand. Increased margins driven by improved pricing realization and a greater leveraging of our fixed costs. Plastics Segment - We are increasing our segment earnings guidance based on: Better than expected financial results in the second quarter of 2026. Revised expectations for PVC pipe pricing for the remainder of the year. Corporate Costs - We expect our costs to increase due to less investment income and a lower tax benefit. CONFERENCE CALL AND WEBCAST The corporation will host a live webcast on Tuesday, August 4, 2026 at 10:00 a.m. CT to discuss its financial and operating performance. The presentation will be posted on our website before the webcast. To access the live webcast, go to www.ottertail.com/presentations and select "Webcast." Please allow time prior to the call to visit the site and download any software needed to listen in. An archived copy of the webcast will be available on our website shortly after the call. If you are interested in asking a question during the live webcast, visit and follow the link provided in the press release announcing the upcoming conference call. NON-GAAP FINANCIAL MEASURES This press release includes certain adjusted financial measures (non-GAAP financial measures). The Company believes these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance and in assessing future performance. For these reasons, internal management reporting also includes non-GAAP financial measures. We use Adjusted Net Income, Adjusted Earnings per Share, and Adjusted Return on Equity in evaluating the operating performance and profitability of our business. Management believes that these measures provide useful information to investors by facilitating period-to-period comparisons of operating results excluding the effects of the legal settlement expense and related income tax benefit. We define Adjusted Net Income as net income excluding legal settlement expenses and the related income tax benefit. We define Adjusted Earnings per Share as diluted net income per share excluding the per share impact of legal settlement expenses and the related income tax benefit. We define Adjusted Return on Equity as annual Adjusted Net Income divided by the average of total consolidated shareholders’ equity excluding the impact of legal settlement expenses and the related income tax benefit. These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, the GAAP financial measures presented in this release and the Company's financial statements and other publicly filed reports. Non-GAAP financial measures presented in this release may not be comparable to similarly titled measures used by other companies. Investors are encouraged to review the reconciliations of adjusted financial measures used in this release to their most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Diluted Earnings per Share are reconciled to their most directly comparable GAAP measures in the non-GAAP Reconciliations section. Guidance for Adjusted Diluted Earnings per Share and Adjusted Return on Equity are forward-looking non-GAAP financial measures that are reconciled to their respective most directly comparable GAAP financial measures in footnote (1) under 2026 Outlook. FORWARD-LOOKING STATEMENTS Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "can," "confident," "could," "estimate," "expect," "future," "goal," "intend," "likely," "may," "optimistic," "opportunity," "outlook," "plan," "possible," "position," "potential," "predict," "probable," "projected," "should," "target," "will," "would" and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2026 earnings and earnings per share, long-term earnings, earnings-per-share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company’s risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures; rate base levels and rate base growth; risks associated with energy markets; the availability and pricing of resource materials; inflationary cost pressures; attracting and maintaining a qualified and stable workforce; changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin; long-term investment risk; seasonal weather patterns and extreme weather events; future business volumes with key customers; reductions in our credit ratings; our ability to access capital markets on favorable terms; assumptions and costs relating to funding our employee benefit plans; our subsidiaries’ ability to make dividend payments; cybersecurity threats or data breaches; the impact of government executive orders, legislation and regulation including foreign trade policy; environmental, health and safety laws and regulations; changes in tax laws and regulations; the impact of climate change including compliance with legislative and regulatory changes to address climate change; expectations regarding regulatory proceedings, assigned service areas, the construction of major facilities, capital structure, and allowed customer rates; actual and threatened claims or litigation; and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. Category: Earnings About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com. Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota. OTTER TAIL CORPORATION NON-GAAP RECONCILIATIONS (unaudited) ADJUSTED NET INCOME (LOSS) AND ADJUSTED DILUTED EARNINGS PER SHARE The following table presents reconciliations of non-GAAP performance measures to the most directly comparable GAAP performance measures for the periods presented: View source version on businesswire.com: https://www.businesswire.com/news/home/20260803962952/en/ Contacts Investor Contacts: Beth Eiken, Manager of Investor Relations, (701) 451-3571Media Contact: Stephanie Hoff, Director of Corporate Communications, (218) 739-8535

The market expects MGE (MGEE) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This public utility holding company is expected to post quarterly earnings of $0.77 per share in its upcoming report, which represents a year-over-year change of +6.9%. Revenues are expected to be $166.37 million, up 4.3% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 8.7% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For MGE, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that MGE will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that MGE would post earnings of $1.13 per share when it actually produced earnings of $1.32, delivering a surprise of +16.81%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. MGE doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Utility - Electric Power industry, Otter Tail (OTTR), is soon expected to post earnings of $1.48 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -20%. This quarter's revenue is expected to be $334.5 million, up 0.4% from the year-ago quarter. The consensus EPS estimate for Otter Tail has been revised 8.9% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Otter Tail will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MGE Energy Inc. (MGEE) : Free Stock Analysis Report Otter Tail Corporation (OTTR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects Otter Tail (OTTR) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 3. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This power company and manufacturer is expected to post quarterly earnings of $1.48 per share in its upcoming report, which represents a year-over-year change of -20%. Revenues are expected to be $334.5 million, up 0.4% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 8.92% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Otter Tail, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Otter Tail will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Otter Tail would post earnings of $1.34 per share when it actually produced earnings of $1.73, delivering a surprise of +29.10%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Otter Tail doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Utility - Electric Power industry, Portland General Electric (POR), is soon expected to post earnings of $0.64 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -3%. Revenues for the quarter are expected to be $843.16 million, up 4.5% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Portland General Electric has been revised 9.6% up to the current level. Nevertheless, the company now has an Earnings ESP of 0.00%, reflecting an equal Most Accurate Estimate. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Portland General Electric will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Otter Tail Corporation (OTTR) : Free Stock Analysis Report Portland General Electric Company (POR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Otter Tail Corporation (NASDAQ:OTTR) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.3% to hit US$347m. Otter Tail also reported a statutory profit of US$1.73, which was an impressive 22% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Following last week's earnings report, Otter Tail's four analysts are forecasting 2026 revenues to be US$1.32b, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 13% to US$5.84 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.30b and earnings per share (EPS) of US$5.64 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates. See our latest analysis for Otter Tail The consensus price target was unchanged at US$90.50, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Otter Tail analyst has a price target of US$90.00 per share, while the most pessimistic values it at US$86.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects. Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Otter Tail's revenue growth is expected to slow, with the forecast 0.6% annualised growth rate until the end of 2026 being well below the historical 3.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Otter Tail is also expected to grow slower than other industry participants. The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Otter Tail's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$90.50, with the latest estimates not enough to have an impact on their price targets. Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Otter Tail going out to 2028, and you can see them free on our platform here.. You should always think about risks though. Case in point, we've spotted 3 warning signs for Otter Tail you should be aware of, and 1 of them is concerning. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Image source: The Motley Fool. May 5, 2026, 11 a.m. ET Chairman & Chief Executive Officer — Chuck MacFarlane President — Timothy Rogelstad Senior Vice President & President, Otter Tail Power Company — Todd Wahlund Vice President & Chief Financial Officer — Tyler Nelson Chuck MacFarlane: Thanks, Beth. Good morning, and welcome to our first quarter earnings call. Before I turn to my prepared remarks on the quarter, I want to briefly touch on our leadership transition we announced last month. These changes are a result of long-standing, thoughtful succession planning by the Board and management team. Effective April 13, Tim Rogelstad was elected President of Otter Tail Corporation. Tim will oversee our Electric and Manufacturing platforms and report directly to me. With over 35 years of experience at Otter Tail, he brings a deep understanding of the organization, our culture and strategy and has a proven track record of strong leadership and execution. At the same time, Todd Wahlund was elected Senior Vice President of the Corporation and President of Otter Tail Power Company, providing continuity and seasoned operational and financial leadership to the utility as it continues to deliver on its rate base growth plan. Todd brings years of operational utility experience to the role, having previously served in resource planning and renewable energy development prior to becoming Otter Tail Power's CFO and later Otter Tail Corporation's CFO. We also announced that Tyler Nelson has been elected Vice President and Chief Financial Officer of the corporation. Tyler has played a key role in our financial leadership for the last 6 years and brings a deep understanding of our financial operations and strategy to the role. These changes do not alter our strategy or priorities. They serve to strengthen our leadership bench as we remain committed to delivering long-term shareholder value. Now let's turn to Slide 4 as I provide an overview of recent operational and financial highlights. We are pleased with our first quarter financial results and are well positioned to achieve our financial objectives for the year. Across our businesses, our team members executed on our near-term priorities for the benefit of our customers and shareholders. Otter Tail Power delivered on our regulatory priorities while making significant progress on our customer-focused rate base growth plan. We achieved a constructive outcome in our South Dakota rate case and implemented new base rates on April 1. We also implemented interim rates for our Minnesota rate case at the start of the year. We completed our $230 million wind repowering project earlier this year, upgrading the wind towers at 4 of our owned wind energy centers. These upgrades are expected to result in a 20% increase in output and are economical for our customers due to the renewed renewable energy tax credits. Phase 2 of our Vinyltech expansion is complete. This marks the end of a multiyear expansion project that added 15% of additional production capacity for our Plastics segment, increased our manufacturing footprint and expanded our raw material storage capabilities. This multiyear expansion project was completed on budget, and we look forward to leveraging this investment to better serve our customers, pursue growth opportunities and enhance our employee experience. Slide 5 provides a summary of our first quarter financial results as well as our expectations for the remainder of the year. We produced diluted earnings per share of $1.73 in the first quarter compared to $1.62 last year. The increase in earnings was driven by strong performance in our Electric and Manufacturing segments. Plastics segment earnings continue to recede within our expectations. We are maintaining our 2026 diluted earnings per share guidance range of $5.22 to $5.62. Following my operational update, Tyler will provide a detailed discussion of our quarterly financial results and our 2026 outlook. Transitioning now to my operational update for Otter Tail Power beginning on Slide 7. We obtained approval from the South Dakota Commission on the settlement agreement reached between Otter Tail Power and commission staff during the first quarter, resulting in a constructive outcome and concluding the rate proceeding. The final outcome of the rate case achieved approximately 75% of our request when considering adjustments for rider treatment. Turning to Slide 8. Our Minnesota rate case continues to progress. Interim rate revenues of $28.6 million went into effect on January 1, subject to refund. Separately, Otter Tail Power is in the process of finalizing its next integrated resource plan. We have held stakeholder meetings to discuss our plan at a high level, and we are on track to file the IRP in Minnesota later this month. Turning to Slide 9. We are reaffirming our 5-year rate base compounded annual growth rate of 10%. Otter Tail Power is expected to continue to convert this rate base growth into earnings per share growth near a 1:1 ratio over the 5-year planning period. Slides 10 and 11 provide an overview of ongoing and future capital projects. Our 2 solar development projects are in the early stages of construction. During the first quarter, our team members secured the solar panels needed for these projects. This strategy eliminates tariff-related risk and helps to avoid any potential cost increases for the benefit of our customers. Our battery storage project remains under development. We are targeting to bring this 75-megawatt storage facility online in 2028. Development work also continues on our large regional transmission projects. We continue to work through areas of landowner and local government opposition associated with siting and certain permits for the Jamestown to Ellendale Tranche 1 project. We received a Minnesota route permit last week for the Big Stone to Alexandria Tranche 1 project, a nearly 100-mile transmission line. We're also monitoring the complaint filed by several states at FERC against MISO's Tranche 2.1 projects. We continue to expect these projects to move forward due to their reliability-related benefits, but believe there could be delays. Turning to Slide 12, which provides an update on our large load pipeline. We removed the 430-megawatt load previously under a term sheet from our pipeline. We no longer expect this project to move forward due to permitting-related challenges as well as failed tax incentive legislation in the South Dakota state legislature. Phase 1 of our pipeline increased by approximately 500 megawatts. We continue to engage with companies interested in adding a new large load to our system. We have and will continue to be prudent in our approach to ensure appropriate guardrails are in place to protect our customers and our shareholders. As a reminder, these changes to our pipeline have no impact on our current load growth forecast or capital spending as we will only adjust our internal forecast for loads that have a signed electric service agreement. We remain committed to providing low-cost electric service to our customers and have demonstrated our ability to do so. As Slide 13 illustrates, Otter Tail Power's electric rates have remained well below the national and regional averages for many years. Looking ahead, we are deeply focused on managing customer bills. We currently project bills to increase between 3% and 4% on a compounded annual growth rate over the current 5-year planning period. This is made possible by MISO's system-wide recovery for our transmission investments, the availability of renewable energy tax credits, reduced energy costs and other factors. Transitioning to our manufacturing platform. Slide 15 provides an overview of the industry conditions impacting our Manufacturing segment. We are optimistic that conditions are improving in several of our end markets. Manufacturing dealer inventory levels have largely normalized, and we experienced increased sales volumes in our construction and recreational vehicle markets. The industrial end market remains strong as our products are used to support the growing energy demand. However, agriculture industry conditions remain challenging due to the weak farm economy with elevated costs, lower relative commodity prices and ongoing trade disruption. T.O. Plastics horticultural end market remains stable with sales volumes improving during the first quarter compared to the same time last year. We continue to face formidable competition from low-cost importers. We are emphasizing our high-quality products and quick delivery capabilities to our customers and appear to be making headway. Slide 16 provides an overview of our Plastics segment pricing and volume trends. Average sales prices of our PVC pipe continued to decline, decreasing 19% from the Q1 2025 average. Sales volumes increased 7% from the same time last year. We benefited from an opportunistic sale of a specialty pipe during this quarter as well as increased distributor and contractor demand late in the quarter. Distributors and contractors sought to secure additional pipe in advance of potential PVC resin cost increases that have been announced by U.S. PVC resin manufacturers. Material input costs, including PVC resin, decreased 12% from the same time last year as the domestic supply of resin was elevated. We are now seeing an increase in PVC resin costs stemming from the conflict in the Middle East. Global PVC resin manufacturers are more heavily impacted by the rising cost of oil, leading to an increase in exports from U.S. resin manufacturers who utilize natural gas as a feedstock. I will now turn it over to Tyler to provide his financial update. Tyler Nelson: Thanks, Chuck, and good morning, everyone. Turning to Slide 18. We are pleased with our first quarter financial results. We generated diluted earnings per share of $1.73, a 7% increase compared to the same time last year. Please follow along on Slides 19 and 20 as I provide an overview of our first quarter results by segment. Electric segment earnings increased $0.25 per share or 43% in the first quarter, driven by increased electric rates and the recovery of our rate base investments. Interim rates in Minnesota and South Dakota went into effect in January 2026 and December 2025. In addition, new base rates in North Dakota were effective for all of Q1 2026, but only a small portion of the same period last year. Our quarterly results also benefited from higher commercial sales volumes across our service territory. These items were partially offset by the impact of unfavorable weather, higher operating and maintenance costs and increased depreciation expense stemming from our rate base investments. Manufacturing segment earnings increased $0.06 per share, driven by higher margins, primarily from a favorable product mix. Increased sales volumes and improved production efficiency also contributed to our quarterly results. Partially offsetting these items were higher general and administrative costs. Turning to Slide 20. Plastics segment earnings decreased $0.24 per share or 24%, primarily due to lower sales prices of our PVC pipe. As Chuck shared earlier, our average sales price decreased 19% from the same time last year. This pricing decline was generally in line with our expectation and continued the trend of receding pricing dating back to the middle of 2022. Partially offsetting the reduction in sales prices are higher sales volumes and lower input material costs. Our volumes benefited from an opportunistic sale of a specialty pipe product and near the end of the quarter, a broader increase in demand spurred by an announced increase in PVC resin costs. Corporate costs decreased $0.04 per share, primarily driven by a timing-based tax benefit compared to the same period last year. Turning to Slide 21. We continue to be in a position of financial strength with a balance sheet capable of funding our rate base growth plan without any external equity needs through at least 2030. Our available liquidity at the end of March was over $650 million, including almost $350 million of cash and equivalents. Our capital allocation strategy remains unchanged. We are focused on using our available cash to fund our utility rate base investments and return capital to our shareholders through our dividend. On Slide 22, we are affirming our annual diluted earnings per share guidance range of $5.22 to $5.62, which is expected to produce a return on equity of approximately 12%. We started the year with momentum and are well positioned to achieve our financial targets. I would like to highlight a few key items we are focused on for the remainder of the year. In our Electric segment, we have a planned major outage at a coal facility beginning in the second quarter and expect higher O&M spend midyear related to asset health and resiliency initiatives. In our Manufacturing segment, we are optimistic about increased sales volumes in the first quarter, but demand visibility becomes less certain in the second half of the year. In our Plastics segment, we expect second quarter sales volumes to be strong and our product pricing to temporarily stabilize as distributors and contractors accelerate pipe purchasing before potential PVC cost increases take effect. However, our annual sales volume forecast remains largely unchanged as we expect the second half of the year to be negatively impacted by the accelerated buying we are seeing now as well as broader macroeconomic conditions. Overall, we are pleased with the start to the year, and our team is focused on delivering upon our strategic priorities over the remainder of 2026. On Slide 23, we summarize and affirm our 5-year capital spending plan. Our planned investment in our Electric segment totals $1.9 billion and is expected to produce a rate base compounded annual growth rate of 10%. Our customer-focused investment plan will be a key driver of earnings growth for this segment over the 5-year period. We continue to project up to $750 million in incremental capital investment opportunity within our Electric segment over the planning period. This incremental opportunity stems from a potential wind generation resource, the acceleration of regional transmission investment and the potential delivery investment to serve a new large load in our service territory. Slide 24 summarizes our financing plan. We continue to expect to fund our 5-year growth plan without any equity issuances. Our robust utility capital program will be primarily financed through existing cash and cash generated from operations over the planning period. At Otter Tail Power, we expect to issue debt periodically to support our rate base growth plan and maintain our authorized capital structure. During the first quarter, we completed a $170 million private placement with $100 million funded in March, with the remaining $70 million scheduled to fund in June. We do not anticipate any further debt issuances in 2026. At the parent level, we have $80 million of debt maturing in the fourth quarter, which we plan to retire using available cash and do not expect to refinance. The value of our diversified portfolio is reflected in our financing strategy. By reinvesting incremental cash flow from our Manufacturing platform into utility rate base growth, we expect to eliminate the need for external equity for at least the next 5 years. On Slide 25, we are reaffirming our expected long-term Plastics earnings profile. We believe segment earnings will continue to decline through the end of 2027 and expect earnings in 2028 to be within a range of $45 million to $50 million. This assumption is based on a continuing decline in the average sales price of our PVC pipe products, higher sales volumes from our recently expanded production capacity and input cost increases generally in line with the rate of inflation. Due to seasonality and other factors, the rate of pricing decline can vary from period to period. Additionally, it continues to be difficult to predict with certainty long-term Plastics segment earnings. The timing or level of earnings could vary materially from our projection. Our Plastics segment continues to be an important component to our overall strategy with the enhanced returns, cash flow and earnings it generates. Even as earnings continue to recede, we expect the segment to produce an accretive return and incremental cash to help fund our electric utilities rate base growth plan. Slide 26 summarizes our investment targets. Underpinned by the significant growth in our Electric segment, we continue to target a long-term earnings per share growth rate of 7% to 9%, resulting in a total targeted shareholder return of 10% to 12%. We anticipate delivering on these targets once Plastics segment earnings normalize in 2028. As we continue to execute on our customer-focused growth plan, we are well positioned to deliver on our investment targets over the long term. Otter Tail Power continues to be a high-performing electric utility, converting its rate base growth into earnings per share growth near a 1:1 ratio. Our manufacturing and plastic pipe businesses consistently produce accretive returns and incremental cash, enabling us to fund our rate base growth plan without any external equity needs through at least 2030. It is this intentional strategic diversification that has and will continue to provide benefits to our customers and investors over the long term. We look forward to what the future holds and are grateful for your interest and investment in Otter Tail Corporation. We are now ready to take your questions. Operator: [Operator Instructions]Our first question comes from the line of Chris Ellinghaus of Siebert Williams Shank. Christopher Ellinghaus: Chuck, given the Iranian situation, does that alter your expectations for what sort of the global resin dynamics will be? Or are you sort of thinking that, that gets resolved before the second half of the year? Chuck MacFarlane: Thanks for the question, Chris. Yes, I think we believe that it long term will be resolved, whether it's completely resolved by the second half of this year, we don't know on that, but we just know that it is impacting the U.S. domestic export price of resin, which drives up the domestic price at this time. Christopher Ellinghaus: Sure. That makes sense. What is driving in manufacturing sort of the recovery in recreational vehicle market dynamics given sort of the negative consumer sentiment this year. Tyler Nelson: Chris, this is Tyler. So I think a couple of things. First, inventory levels in the channel, both at the dealer and the manufacturer have normalized. I think they're at a good level where we will see more throughput on any demand at the end customer level. We will feel that now that inventories have normalized. In addition to that, some of the higher-end models, we continue to see strength in product demand, whereas the lower-end models more subject to macroeconomic conditions, that's where we have seen some ongoing softness. But at the mid and higher levels, we have seen a bit of a pickup in demand. Christopher Ellinghaus: Okay. And in the pipeline side did that letter of intent customer slide back into the broader pipeline? Or they just give up altogether? Timothy Rogelstad: Chris, this is Tim Rogelstad. No, we continue to work with that customer. I would say they're not currently in the pipeline of projects, but I think we'll continue to explore options, and it's possible we could see them come back in. Christopher Ellinghaus: Okay. Are they -- was it more the permitting site issue or the tax issue that was particularly important to them? Timothy Rogelstad: From our understanding, I think both of them were definitely barriers for them to want to move forward in South Dakota. I'm not sure if one was more important over the other, but that's where the situation sits. Christopher Ellinghaus: Okay. And can you give us any update on the Minnesota rate case process? What's the next big hurdle for you? Timothy Rogelstad: Okay. Well, we are in the middle of discovery right now. And probably one of the unique things that's happened in this particular case is the pace of discovery started a little bit later than what we were used to. So the last 2 months have been -- we've seen what I'd characterize as heavy discovery. The next step will be the expectation of getting the intervenor testimony, which we expect sometime here in the second quarter. Christopher Ellinghaus: Okay. There's been a decent run-up in interest rates lately. Do you expect to make any adjustments to the case for what we're seeing today? Tyler Nelson: Chris, this is Tyler. No, we don't expect any adjustments for the interest rate environment that we're experiencing today. They do take into account the debt issuance, the debt offering that we completed that gets factored into the case. But outside of that, no other adjustments planned. Operator: As there are no remaining questions in the queue, I will turn the call back over to Chuck for his closing remarks. Chuck MacFarlane: Thank you for joining our call and your interest in Otter Tail Corporation. If you have any questions, please reach out to our Investor Relations team, and we look forward to speaking with you next quarter. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in Otter Tail, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Otter Tail wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Otter Tail (OTTR) Q1 2026 Earnings Transcript was originally published by The Motley Fool