奧特泰爾 (OTTR) 2026 年第三季法說會：EPS 下滑，財測指引收窄

Otter Tail Corporation (NASDAQ: OTTR) 公布 2026 年第三季稀釋後每股盈餘為 1.41 美元，低於去年同期的 1.86 美元。PVC 管材價格下滑、塑膠事業部銷量疲軟以及原料成本上升，是導致獲利衰退的主因。

重點摘要

• 2026 年第三季稀釋後 EPS 降至 1.41 美元，低於 2025 年第三季的 1.86 美元，主因為塑膠事業部表現下滑。
• Otter Tail 將 2026 年調整後稀釋每股盈餘指引區間收窄至 5.73 至 6.03 美元（原先為 5.68 至 6.08 美元），同時維持 5.88 美元的中位數不變。
• 塑膠產品平均售價年減 9%，銷售量下滑 5%，且 PVC 樹脂及其他投入成本增加 10%。
• 電力事業部本季獲利持平，但 2026 年前九個月成長 14%。管理層重申五年費率基數複合年增率 (CAGR) 目標為 10%。
• 公司重申 Otter Tail Power 的 19 億美元五年資本支出計畫，並將已確認的新增投資機會從 7.5 億美元提高至 8.5 億美元。
• 管理層預計塑膠事業部的獲利將持續下滑至 2027 年底，隨後於 2028 年回升至 4,500 萬至 5,000 萬美元，具體取決於價格、季節性及其他因素。

關鍵財務結果

業務與營運表現

電力事業

Otter Tail Power 受益於費率基數投資回收、明尼蘇達州與南達科他州電價上調，以及有利的天氣條件。然而，這些收益大部分被較高的人力成本、植被管理費用及電廠停機維修成本所抵銷。

在明尼蘇達州的費率審查案中，該公司將要求的淨營收增加額從 4,230 萬美元調降至 3,870 萬美元，主因是管轄權分攤調整。管理層表示正繼續尋求具有建設性的結果。

公司重申其預期的 五年費率基數 CAGR 為 10%，並預計在規劃期間 Otter Tail Power 的獲利將以類似速度成長。該計畫並不依賴獲取大型新增用電負載。

Solway 太陽能案場仍預計於 2027 年上半年投入營運，而 Abercrombie 太陽能案場預計於 2028 年下半年併網。此外，公司亦計畫於 2028 年建成一座電池儲能設施。

製造事業

隨著多個終端市場狀況改善，加上該事業部從現有客戶獲得額外業務，製造事業部的銷售量有所增長。建築需求有所改善，工業需求維持強勁，而休閒車、草坪花園及園藝市場則保持穩定。

然而，與新員工培訓相關的生產成本增加及生產力降低壓縮了利潤率。製造事業部本季獲利每股減少 0.03 美元，不過今年前九個月累計獲利成長了 28%。

塑膠事業

PVC 管材平均售價較去年同期下滑 9%，銷售量則減少 5%。管理層將銷量下滑歸因於客戶在宣布樹脂漲價後於 2026 年提前提貨，以及房市放緩所致。

PVC 樹脂及其他投入成本上漲 10%，壓縮了利潤率。業績中還包含一筆與預估供應商回扣及認列時間點相關的一次性調整。

鳳凰城廠區擴充的大口徑管材產能部分抵銷了銷量下滑的影響。管理層亦指出資料中心及其他大型製造設施帶動了對水利基礎設施的需求。

管理層營運指引

Otter Tail 將 2026 年調整後稀釋每股盈餘指引區間收窄至 5.73 至 6.03 美元，先前區間為 5.68 至 6.08 美元。中位數仍為 5.88 美元。該指引排除 2026 年第二季認列的法律和解費用稅後影響。

由於需求疲軟、房貸利率居高不下、已開發地塊庫存增加以及新屋開工承壓，管理層調降了塑膠事業部展望的中位數。此外，鑑於第三季內部業績優於預期，管理層提高了企業成本中心展望的中位數。

公司重申 Otter Tail Power 的 19 億美元五年資本投資計畫。潛在新增投資增加至 8.5 億美元，主因是一項可能的風電計畫規模從 200 百萬瓦 (MW) 擴大至 300 百萬瓦 (MW)。

管理層預計無需透過股權資本市場融資即可為該計畫提供資金，並繼續預期在年底前償還母公司層級唯一的未到期債務。

一旦塑膠事業部獲利於 2028 年恢復正常，公司的長期每股盈餘成長目標為 7% 至 9%，總股東報酬率目標為 10% 至 12%。

風險與關注焦點

• 輸電網的開發與建設變得更加複雜，特別是在選址和地方關切方面。管理層表示，這可能會使五年計畫中的部分區域性計畫有所延誤。
• 住房需求疲軟、高房貸利率以及已開發地塊庫存增加，正對 PVC 管材銷量帶來壓力。
• 塑膠事業部的利潤率仍面臨售價下跌以及 PVC 樹脂與其他原料成本上漲的風險。
• 製造事業部的獲利能力正面臨生產成本上漲以及新員工入職帶來的生產力壓力。
• 管理層警告，受季節性及其他因素影響，塑膠事業部的產品定價與獲利可能會出現大幅波動。

分析師問答環節亮點

管理層表示，對輸電計畫的需求依然明確，但選址難度增加及地方疑慮可能會拉長計畫時程。公司預計將在公布年報時提供更新後的五年資本計畫。

在 PVC 管材定價方面，管理層指出，年減 9% 的幅度和前幾個季度相比有所收窄。第二季較高的樹脂成本和強勁的客戶需求對價格提供了支撐。向更多大口徑管材轉移對樹脂成本與售價之間的關係沒有產生重大影響。

法說會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.