Otter Tail Affirms 2026 EPS Midpoint After Third-Quarter Rebound

The Tip Desk · November 10, 2026 · 4 min read

Diluted earnings were $1.41 a share in the quarter ended Sept. 30, 2026, as the company narrowed its full-year range to $3.89–$4.19.

Otter Tail Corporation (OTTR), a diversified electric utility and manufacturer, produced diluted earnings of $1.41 a share for the quarter ended September 30, 2026, reversing a $0.18 quarterly loss in the prior period.

The company affirmed the midpoint of its 2026 diluted earnings guidance and narrowed the range to $3.89 to $4.19 from $3.84 to $4.24. Adjusted diluted earnings guidance was narrowed to $5.73 to $6.03 from $5.68 to $6.08.

Consolidated operating revenues were $320.5 million in the third quarter, down from $325.6 million a year earlier. Net income was $59.5 million, compared with $78.3 million a year earlier.

Plastics, the largest profit contributor, was the quarter’s operating reversal. Operating revenues fell 12.9% to $95.8 million from $110.0 million a year earlier, on a 9% drop in average sales prices and a 5% drop in volumes. Net income fell 33.4% to $29.0 million from $43.5 million.

The company said average sales prices continued to moderate from the peak reached in late 2022. Lower volumes were attributed to customers pulling PVC pipe purchases earlier in the year ahead of announced resin cost increases and to softer demand in certain regional markets, including housing. Increased production capacity at the Phoenix facility partially offset the volume declines. Net income also reflected a 10% increase in PVC resin and other input material costs.

That volume pattern reversed from the second quarter, when the company said Plastics outperformed expectations as customers sought to secure PVC pipe in advance of resin price increases.

Manufacturing moved the other way on revenue. Operating revenues rose 16.6% to $89.7 million from $77.0 million a year earlier, on a 13% increase in sales volumes and the pass-through of higher steel costs. The company said volumes reflected improved demand in construction, recreational vehicle, lawn and garden, and industrial markets after softer conditions and customer inventory reduction a year earlier. Net income fell 34.4% to $2.6 million from $3.9 million, which the company attributed to higher selling, general, and administrative expenses and lower gross profit margins from inflationary cost pressures and added headcount.

Electric operating revenues declined 2.6% to $135.0 million from $138.6 million a year earlier, while net income rose 0.4% to $27.4 million from $27.3 million. Retail megawatt-hour sales increased 0.9% to 1,385,582 MWh. Cooling degree days were 41.1% above the year-ago quarter. The company said the revenue decline was primarily an $11.9 million decrease in fuel recovery revenues and the impact of increased production tax credits, neither of which affects net income, partially offset by $5.9 million from rate increases in Minnesota and South Dakota, $2.7 million from recovery of additional rate base investments, and $2.3 million from favorable weather. Net income also reflected higher operating and maintenance expenses, as well as higher depreciation and interest associated with rate base growth.

Corporate net income was $506 thousand, down from $3.6 million a year earlier, primarily due to lower income tax benefits and lower investment income.

For the nine months ended September 30, 2026, the company recorded a $103.5 million legal settlement expense related to PVC pipe U.S. antitrust class actions, which it excluded from adjusted results. Adjusted diluted earnings for the nine months were $4.79 a share versus $5.32 a year earlier. The company said it agreed to pay $103.5 million to resolve the class action litigation in the second quarter.

Consolidated cash provided by operating activities was $307.9 million for the nine months ended September 30, 2026, compared with $288.9 million for the same period in 2025. Investing activities included $451.6 million of capital expenditures, largely in the Electric segment for solar, wind repowering, and transmission and distribution. Financing included $170.0 million of long-term debt issued by Otter Tail Power. Available liquidity as of September 30, 2026 totaled $601.8 million.

The board declared a quarterly common stock dividend of $0.5775 a share, payable December 10, 2026. The company said it continues to target long-term earnings per share growth of 7 to 9 percent and total shareholder return of 10 to 12 percent.