Otter Tail (OTTR) Q2 2026 earnings summary

Executive summary

• Reported a Q2 2026 net loss of $7.6 million due to a $103.5 million legal settlement in the Plastics segment, but adjusted diluted EPS was $1.66 after excluding settlement impacts.

• Advanced strategic initiatives, including regulatory filings, securing permits for major transmission projects, and filing a 15-year integrated resource plan in Minnesota.

• Manufacturing and Plastics segments leveraged new capacity and improved demand for higher sales volumes, with Manufacturing segment net income up 31.3%.

• Entered settlement agreements in U.S. PVC pipe antitrust litigation, reducing legal uncertainty with a $103.5 million payment.

Financial highlights

• Q2 2026 adjusted diluted EPS was $1.66, down from $1.85 in Q2 2025, mainly due to lower PVC pipe prices and legal settlement impacts.

• Q2 2026 net income was $69.6 million adjusted, with consolidated operating revenues of $334.4 million, nearly flat year-over-year.

• Plastics segment sales volumes rose 15% year-over-year, while average sales price fell 14%.

• Manufacturing segment earnings increased 38% due to higher margins and volumes.

• Cash and cash equivalents at June 30, 2026 were $278.4 million, with total liquidity of $601.4 million.

Outlook and guidance

• Adjusted diluted EPS guidance for 2026 set at $5.68–$6.08, with long-term EPS growth targeted at 7–9% and total shareholder return at 10–12%.

• 2026 diluted EPS guidance lowered to $3.84–$4.24 due to the legal settlement.

• Manufacturing and Plastics segment guidance increased based on stronger Q2 results and revised pricing expectations.

• No external equity needed to fund current growth plan through at least 2030.

• Finalization of the Minnesota rate case expected in April 2027, with final rates effective in the second half of 2027.