奥特泰尔 (OTTR) 2026年第三季度业绩电话会：每股收益下滑，业绩指引收窄

Otter Tail Corporation（NASDAQ：OTTR）公布2026年第三季度摊薄后每股收益为1.41美元，低于去年同期的1.86美元。PVC管道价格下跌、塑料业务销量走弱以及材料成本上升是导致业绩下滑的主要原因。

核心要点

• 2026年第三季度摊薄后每股收益降至1.41美元，而2025年第三季度为1.86美元，主要归因于塑料板块业绩走弱。
• Otter Tail将2026年调整后摊薄每股收益指引区间收窄至5.73-6.03美元（此前为5.68-6.08美元），同时维持5.88美元的中点值不变。
• 塑料业务平均售价同比下降9%，销量下降5%，PVC树脂及其他投入成本上涨10%。
• 电力板块本季度收益同比持平，但2026年前九个月增长了14%。管理层重申了五年费率基数年均复合增长率（CAGR）达10%的目标。
• 公司重申了Otter Tail Power达19亿美元的五年资本计划，并将已识别的增量投资机会从7.5亿美元上调至8.5亿美元。
• 管理层继续预计塑料业务收益将持续下滑直至2027年底，随后在2028年达到4500万至5000万美元，具体取决于定价、季节性及其他因素。

关键财务业绩

业务与运营表现

电力业务

Otter Tail Power得益于费率基数投资回收、明尼苏达州及南达科他州电价上涨以及有利的天气条件。但这些收益很大程度上被人工成本上升、植被管理支出以及电厂停运成本所抵消。

在明尼苏达州的电价申请案中，该公司将申请的净营收增加额从4230万美元下调至3870万美元，主要是由于管辖权分配做出了调整。管理层表示，正继续争取达成建设性的结果。

公司重申了其预期的10%五年费率基数年均复合增长率（CAGR），并表示预计Otter Tail Power的收益在规划期内将以类似的速度增长。该计划并不依赖于获取大型新增负荷。

Solway光伏项目仍计划于2027年上半年投入运营，而Abercrombie光伏项目预计将于2028年下半年上线。此外，还计划于2028年建成一座电池储能设施。

制造业务

随着多个终端市场状况好转，加之该业务板块从现有客户处获得了更多业务，制造业务销量有所增长。建筑需求改善，工业需求保持强劲，休闲车（RV）、草坪与花园以及园艺市场保持稳定。

然而，与新员工入职相关的生产成本上升和生产率下降挤压了利润率。本季度制造业务收益每股减少0.03美元，尽管今年迄今收益增长了28%。

塑料业务

PVC管道平均售价同比下降9%，同时销量下降了5%。管理层将销量下滑归因于客户在宣布树脂涨价后于2026年较早时间提前采购，以及房产市场走弱。

PVC树脂及其他投入成本上涨了10%，挤压了利润率。业绩还包括与预估供应商返利及其确认时点相关的单笔一次性调整。

凤凰城工厂扩充的大口径管道产能部分抵消了销量下滑的影响。管理层还指出了与数据中心及其他大型制造设施相关的水利基础设施需求。

管理层业绩指引

Otter Tail将其2026年调整后摊薄每股收益指引区间收窄至5.73-6.03美元，此前指引区间为5.68-6.08美元。中点值仍为5.88美元。该指引不包括2026年第二季度确认的法律诉讼和解费用的税后影响。

由于需求走弱、按揭贷款利率高企、已开发地块库存增加以及新房开工面临压力，管理层下调了塑料业务展望的中点值。鉴于内部第三季度业绩好于预期，管理层上调了公司总部成本中心展望的中点值。

公司重申了Otter Tail Power达19亿美元的五年资本投资计划。潜在的增量投资上调至8.5亿美元，这主要是由于一个潜在的风电项目规模从200兆瓦扩大到了300兆瓦。

管理层预计无需通过股权融资市场即可为该计划提供资金，并继续预计在年底前偿还其母公司层面唯一尚未到期的债务。

一旦塑料业务收益在2028年实现正常化，公司的目标是实现每股收益长期增长7%-9%，股东总回报率达到10%-12%。

风险与关注事项

• 输电开发与建设变得更加复杂，特别是围绕选址和地方诉求方面。管理层表示，这可能会推迟五年计划中的部分区域项目。
• 住房需求走弱、房贷利率高企以及已开发地块库存增加，正在对PVC管道销量施加压力。
• 塑料业务的利润率仍面临售价下跌以及PVC树脂和其他材料成本上升的风险。
• 制造业务的盈利能力正面临生产成本上升以及新员工入职带来的生产率压力。
• 管理层提醒，由于季节性及其他因素，塑料业务的价格和收益可能会发生重大波动。

分析师问答环节亮点

管理层表示，对其输电项目的需求依然未变，但选址复杂度的增加和地方关注可能会延长项目周期。公司预计将在公布年终业绩时提供更新后的五年资本计划。

关于PVC管道定价，管理层指出，9%的同比降幅慢于前几个季度。第二季度树脂成本上升和客户需求强劲有助于支撑价格。向更多大口径管道的转变并未对树脂成本与售价之间的关系产生实质性影响。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us and welcome to the Otter Tail Corporation Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference call over to Beth Eiken. Please go ahead.

Beth Eiken

Good morning, and welcome to our third quarter 2026 earnings conference call. My name is Beth Eikin, and I'm Otter Tail Corporation's Manager of Investor Relations. Last night, we announced our Q3 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 to 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. Otter Tail Cell Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments or otherwise.

We'll 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 presentation. 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 third quarter earnings call. Please refer to Slide 4 as I begin my remarks with a summary of our quarterly highlights. Our team delivered on our strategic growth plan and near-term priorities during the third quarter despite navigating a challenging operating environment. Otter Tail Power continues to perform well, executing on our regulatory priorities and robust rate base growth plan, all while navigating a heavy workload. Our ongoing Minnesota rate case is progressing, and our team is working toward reaching a constructive outcome. We also advanced our renewable generation and transmission capital investments during the quarter despite facing an increasingly complex environment to develop and construct large infrastructure projects. .

Our team remains focused on continuing our long history of strong project execution for the benefit of our customers and shareholders. Our Manufacturing and Plastics segment team members faced a dynamic market conditions during the quarter, including higher production costs and a softening new housing market. Despite this, our team continued to execute on their customer-first strategy and effectively leverage the added manufacturing capacity in Arizona and Georgia helping to offset the negative impact of the headwinds faced.

Slide 5 provides a summary of our financial results. We produced diluted earnings per share of $1.41 in the third quarter compared to $1.86 last year. This expected decrease was primarily driven by Plastics segment performance as the average sale price of our PVC pipe continue to recede. We are affirming our midpoint of our adjusted diluted earnings per share guidance range of $5.88 and are narrowing the range. Following my operational update, Tyler will provide a detailed discussion of our 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 third quarter, we submitted our server bundle testimony and the ALJ hearing was conducted on our ongoing Minnesota rate case. In the filing, we modified our requested net revenue increase to $38.7 million from $42.3 million. The modification was largely driven by a jurisdictional allocation adjustment. Our team continues to work towards reaching a constructive outcome in the case. Separately, we continue to evaluate if a rate case filing is warranted in any of our other jurisdictions.

Turning to Slide 8. Our 15-year Integrated Resource Plan filed with the Minnesota Commission is also progressing. We responded to information request throughout the third quarter and initial comments from our intervenors were filed in mid-October. In the Minsala Department of Commerce's initial comments, they recommended additional renewable generation beyond what we had included in our request and suggest that battery storage is an alternative to natural gas. Our reply comments are due in December.

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 and are focused on strong project execution. As a reminder, our plan is not dependent on securing any large loads and any such load remains an incremental opportunity for us. Slides 10 and 11 provide an overview of our ongoing and future capital projects. Our 2 solar projects are under construction and remain on schedule and on budget. We anticipate Solway Solar becoming operational in the first half of 2027, and Abercrombie solar in the last half of 2028.

Our battery storage project is under development, and we expect to bring this facility online in 2028. Development work is also continuing on our large regional transmission projects. We are facing increased challenges developing and constructing certain transmission projects. These challenges could pose a risk to our original time lines for some of the large regional transmission projects included in our 5-year capital spending plan. Our team continues to proactively engage with landowners, community members, local units of government and others to articulate the liability-related benefits these projects would bring to the region.

Turning to Slide 12. Otter Tail Power remains well positioned to attract and support large loads. We are engaging with a diverse set of companies interested in adding new loads to our system. We view the diversity of our pipeline as 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. 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 and helping our customers identify ways to save. 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, and we are encouraged by the increased demand. Our team members remain focused on delivering on our strategy of providing value-added service to our customers and being our customers' partner of choice. The recreational vehicle lawn and garden and horticulture end markets remained stable.

The construction end market continues to improve as our world-class OEM customers are seeing an increase in demand for their products. The industrial end market remains strong as the product facture are used to support the growing energy demand. Agriculture industries continue to remain challenging. However, we are starting to see a slight improvement looking out to next year from current levels. Slide 16 provides an overview of our Plastics segment pricing and volume trends. The average sale price of our PVC pipe continues to decline during the third quarter, decreasing 9% from the same time last year. Sales volumes decreased 5%. This decline was largely due to our customers advancing the purchases of our PVC pipe in response to announced resin price increases earlier this year and the impact of a softening housing market.

However, our team continues to effectively leverage the large diameter capability added at our Phoenix facility, which has helped to partially offset the year-over-year decrease in volumes. Despite the more subdued housing market, we are seeing an opportunity from increased demand for water infrastructure including PVC pipes stemming from data centers and the construction of other large manufacturing facilities. PVC resin and other input material costs have increased 10% from the same time last year, primarily due to global PVC resin supply and demand dynamics. With that, I will turn it over to Tyler to provide his financial update.

Tyler Nelson

Thanks, Chuck, and good morning, everyone. Turning to Slide 18. We produced diluted earnings per share of $1.41 during the third quarter compared to $1.86 last year. This expected decline in earnings was primarily from our Plastics segment as we continue on the glide path for earnings levels more in line with our long-term expectations. Please follow along on Slides 19 and 20 as I provide an overview of our third quarter results by segment. Electric segment earnings were flat year-over-year. Our financial results were positively impacted by the timely recovery of our rate base investments, net of the incremental depreciation and financing costs. We also benefited from higher electric rates in both Minnesota and South Dakota as well as the favorable impact of weather. As expected, these items were largely offset by higher operating and maintenance costs, driven by increased labor, vegetation management and plant outage-related costs.

As we anticipated, our operating costs were higher in the third quarter of 2026 than the same period last year, primarily due to timing differences in spend between periods. Through the first 9 months of 2026, Electric segment earnings were up 14% compared to the same time last year. Manufacturing segment earnings decreased $0.03 per share this quarter. The decrease was primarily due to lower gross profit margins, driven by higher production costs and lower productivity from the onboarding of new employees. General and administrative expenses was also higher than in the quarter compared to the same time last year. Partially offsetting these items were higher sales volumes as industry conditions and many end markets we serve are improving and our team has been successful in capturing new business with our existing customer base.

Overall, we are not satisfied with our quarterly segment financial results as the growth in the business was offset by cost and productivity related pressures, but our management team is focused on improving productivity and managing costs in the business. Despite the challenges in the third quarter, segment earnings are up 28% on a year-to-date basis compared to last year.

Turning to Slide 20. Plastics segment earnings decreased $0.34 per share. The expected decline in earnings was primarily driven by lower PVC pipe pricing as the average sales price of our PVC pipe continues to recede. As expected, sales volumes decreased during the quarter, driven by our customers advancing their purchases earlier this year in response to announced PVC resin price increases. In addition, a softening housing market also contributed to lower sales volumes in the quarter. Material costs were higher during the quarter due to global supply and demand dynamics leading to compressed margins.

Lastly, segment financial results were negatively impacted by a onetime adjustment for estimated vendor rebates and the timing of recognizing such rebates as a cost of inventory or is a benefit to earnings. Corporate costs increased $0.08 per share, primarily due to lower income tax benefits recognized during the quarter and lower investment income resulting from a decrease in short-term investment balances. While our corporate costs increased compared to the same time last year, our quarterly results were better than we expected.

Turning to Slide 21. We continue to be in a position of financial strength. Our equity layer as a percentage of total capital was 61% as of the end of September, and we had over $600 million of available liquidity and including over $250 million of cash, cash equivalents and marketable securities. Our balance sheet continues to position us well to efficiently fund our current rate base growth plan, providing benefits for our customers and shareholders through support for customer affordability and avoided shareholder dilution.

On Slide 22, we are affirming the midpoint of our adjusted diluted earnings per share guidance and narrowing the range to $5.73 to $6.03 from $5.68 to $6.08. As a reminder, this range excludes the after-tax impact of the legal settlement expense recognized in the second quarter. While maintaining the midpoint of our adjusted diluted earnings per share guidance we did modestly adjust the midpoint of our plastics and corporate guidance ranges. The revised midpoint of our adjusted plastics guidance reflects a softening demand environment, as mortgage rates remain elevated and develop lot inventory increases, putting downward pressure on new home construction.

In addition, the onetime adjustment for vendor rebates, I previously discussed, also impacts our annual earnings expectations. We increased the midpoint of our corporate cost center largely due to better-than-expected third quarter results. As we look to close out the year, we remain confident in our ability to deliver on our 2026 financial objectives.

On Slide 23, we are reaffirming our 5-year capital investment plan, with Otter Tail Power's portion totaling $1.9 billion. While maintaining the base plan, we did increase our incremental investment opportunity for the current planning period from $750 million to $850 million. This increase is largely driven by the upsizing of a potential wind project investment opportunity from 200 megawatts to 300 megawatts. We anticipate providing a revised 5-year capital spending plan during our year-end earnings call in February of next year.

Slide 24 summarizes our financing plan, which remains unchanged. We continue to anticipate retiring and not replacing our only outstanding parent-level debt by the end of the year and given our strong balance sheet and cash generation of our manufacturing platform businesses, we continue to expect to fund our customer-focused growth plan without needing to access the equity capital markets.

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 and 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. Even as earnings continue to recede, we expect the segment to continue to produce an accretive return and incremental cash that we can use to reinvest into our utility first model.

Slide 26 summarizes our financial objectives. Our long-term earnings per share growth rate target is 7% to 9%, which results in a total shareholder return target of 10% to 12%. We anticipate delivering on these targets once Plastic segment earnings normalize in 2028. As we continue to execute on our customer-focused growth plan, we are well positioned to deliver on our financial objectives 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 in the nation and region. Our manufacturing and plastic pipe businesses continuously produce accretive returns and incremental cash, enabling us to efficiently fund our 5-year capital spending plan. 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] Your first question comes from the line of Tate Sullivan with Maxim Group.

分析师问答

Tate Sullivan

Chuck, you mentioned some risk to the transmission projects in the 5-year plan. First, can you talk about what some of those some of the time line -- longer time line might be due to for those projects? .

Timothy Rogelstad

Sure. This is Tim, and I'll take that question. And maybe just a little bit of background. We've had a long history over the last 15 to 20 years of developing transmission and executing transmission projects. And we're just seeing more complexity and more difficulty in siding. And while we're very confident in the projects that we have, the need for them and things along those lines, it's just fundamentally as we're addressing local concerns and things like that, there could be some delays. Now we aren't in a position at this point to say that we're going to adjust our 5-year plan or anything like that. But we anticipate that when we report our year-end earnings that we'll have an update at that point in time. But -- but overall, we still remain confident, but it's just -- we're just in a more difficult environment right now.

Tate Sullivan

And that was -- you answered my second question on that topic about the transmission CapEx plan, I mean, going up, meaning -- currently planning to go up double in 2027. But I'll follow-up on the year-end. On shifting to PVC and the slide where you traditionally point out the price and sales prices, volumes and material input costs. I mean can you comment -- I mean usually, and going back to historical presentations, when the input costs will increase, that will sometimes usually translate to higher sales prices as well. Was there a different dynamic this quarter or going into the future quarters that we should consider, please? .

Tyler Nelson

Tate, this is Tyler. I can answer your question. So we did see some pricing strength during the quarter. You can see on the slide that you referenced, our average price was down about 9% compared to the same quarter last year. That's a slower rate of decline than we've seen over the last number of quarters. Certainly, that could be driven by an increase in the resin cost plus, as we talked about in our prior quarter call, we did see elevated demand in the second quarter from our customers. and that provided support for pricing strength on our part.

Tate Sullivan

Is it a different consideration with selling more larger diameter pipe from the expanded facility -- or is that not just a consideration for that?

Chuck MacFarlane

No, that wouldn't -- that doesn't have a material impact, I would say as we think about resin costs and how that impacts our pricing profile. .

Operator

We have reached the end of the Q&A session. I will now turn the call back over to Chuck McFarlane for closing remarks.

Chuck MacFarlane

Thank you for joining our call and your interest in Otter Till Corporation. If you have any questions, please reach out to our Investor Relations team. We look forward to speaking with you next quarter and seeing many of you at the EEI Financial Conference. .

Operator

This concludes today's call. Thank you for attending. You may now disconnect.