Otter Tail Corp (OTTR) Reports 9% Rise in Q3 Net Income Despite Decreased Operating Revenues
Consolidated operating revenues for Q3 2023 decreased by 7% to $358 million.
Consolidated net income increased by 9% to $92 million.
Diluted earnings per share also rose by 9% to $2.19 per share.
The company's Board of Directors declared a quarterly dividend of $0.4375 per share.
On October 31, 2023, Otter Tail Corp (NASDAQ:OTTR) announced its financial results for the quarter ended September 30, 2023. Despite a 7% decrease in consolidated operating revenues to $358 million, the company reported a 9% increase in consolidated net income to $92 million. Diluted earnings per share also increased by 9% to $2.19 per share.
CEO Overview
President and CEO Chuck MacFarlane attributed the record-setting quarterly earnings to the combined efforts of the company's employees and its diversified business model. He noted that the Manufacturing segment saw a 20% growth in earnings due to increased sales volumes and profit margins, while the Plastics segment earnings increased by 6% primarily due to stronger operating margins.
Financial Performance
Otter Tail Corp (NASDAQ:OTTR)'s Electric segment earnings remained flat compared to Q3 2022. The Manufacturing segment saw a 1.9% increase in operating revenues to $100.7 million and a 19.7% increase in net income to $7.4 million. The Plastics segment reported a decrease in operating revenues but saw a significant increase in net income due to improved profit margins.
2023 Business Outlook
The company has increased its 2023 diluted earnings per share guidance to a range of $6.76 to $6.96, primarily driven by stronger than expected Plastics segment earnings and revised expectations for the fourth quarter of the year. The company expects its earnings mix in 2023 to be approximately 30% from the Electric segment and 70% from the Manufacturing and Plastics segments, net of corporate costs.
Dividend Declaration
On October 30, 2023, the corporations Board of Directors declared a quarterly common stock dividend of $0.4375 per share, payable on December 8, 2023, to shareholders of record on November 15, 2023.
Financial Statements
The company's financial statements, including the Consolidated Statements of Income, Balance Sheets, and Cash Flows, as well as Segment Results, are available for review. As of September 30, 2023, Otter Tail Corp (NASDAQ:OTTR) had $468.1 million of total available liquidity.
Final Remarks
Otter Tail Corp (NASDAQ:OTTR) continues to demonstrate financial resilience despite challenging market conditions. The company's diversified business model and strategic investments have contributed to its strong performance, and it remains well-positioned to deliver on its financial targets.
Explore the complete 8-K earnings release (here) from Otter Tail Corp for further details.
This article first appeared on GuruFocus.
