Otter Tail Corporation (NASDAQ: OTTR) has announced its financial results for the quarter and year ended December 31, 2024. The company reported record annual earnings, with annual diluted earnings per share of $7.17, representing an increase from the previous period. The consolidated return on equity was reported at 19.3%, reflecting an increase from the previous period's figure of 13.8%. The electric utility’s five-year rate base compounded annual growth rate was updated to 9.0% from 7.7%. Additionally, the long-term earnings per share growth rate target was increased to 6 to 8%, up from the previous target of 5 to 7%.
In terms of cash flows and liquidity, Otter Tail Corporation reported a record consolidated cash provided by operating activities of $452.7 million in 2024, compared to $404.5 million in 2023. The company's available liquidity under its credit facilities and cash and cash equivalents also increased to $606.3 million as of December 31, 2024, from the previous period.
In the electric segment, operating revenues decreased by 0.7% from the previous period, while net income increased by 7.7%. The manufacturing segment experienced a 14.9% decrease in operating revenues and a 36.2% decrease in net income. However, the plastics segment saw a 10.9% increase in operating revenues and a 6.9% increase in net income. The corporate segment reported a net loss of $3.7 million, compared to a net income of $565,000 in the previous period.
For the fourth quarter of 2024, the consolidated operating revenues decreased by 3.6% compared to the same period in the previous year. The electric segment reported a net income increase of $4.5 million, while the manufacturing segment reported a net loss of $0.6 million, and the plastics segment reported a net income decrease of $0.6 million. The corporate segment's net loss was $5.0 million, a decrease from the previous period.
Looking ahead to 2025, Otter Tail Corporation anticipates diluted earnings per share to be in the range of $5.68 to $6.08, reflecting a decline from the 2024 figure of $7.17. The company expects the earnings mix in 2025 to be approximately 39% from the electric segment and 61% from the manufacturing and plastics segments, net of corporate costs. The return on equity is projected to be in the range of 13.8% to 14.6%, down from the 2024 figure of 19.3%. The company also provided detailed segment earnings guidance for 2025, outlining the expected performance of each business segment.
In terms of capital expenditures, Otter Tail Corporation's updated five-year capital expenditure plan includes electric segment investments in wind and solar resources, transmission and distribution assets, and investments in system reliability and technology, aiming to achieve a compounded annual growth rate on average rate base of 9.0% over the next five years.
The company will host a live webcast on Tuesday, February 18, 2025, at 10:00 a.m. CT to discuss its financial and operating performance.
As a result of these announcements, the company's shares have moved 7.7% on the market, and are now trading at a price of $82.93. Check out the company's full 8-K submission here.
