Otter Tail Reports Earnings of $1.41 per Share, Keeps Midpoint of 2026 Guidance Unchanged
Key Facts
Otter Tail reported on November 2 results for the quarter ended September 30, 2026, posting diluted earnings of $1.41 per share. That was down from $1.86 per share in the third quarter of 2025. The company kept the midpoint of its 2026 annual earnings guidance unchanged, while narrowing the range from the guidance issued in August. Segment results showed a contrast between manufacturing revenue growth and cost pressures, and lower electric revenue alongside a slight increase in net income. The stock closed at $90.35 on October 30, two days before the results were announced.
Manufacturing segment revenue rose 16.6% to $89.709 million in the third quarter, but net income fell 34.4% to $2.569 million. The company said sales volumes increased 13% as demand improved in the construction, recreational vehicle, turf and garden, and industrial markets. Passing through higher steel costs also contributed to revenue growth, according to the company’s statement. But the increase in sales did not prevent declines in margins and profitability. The company said, "Gross profit margins were negatively impacted by inflationary cost pressures and lower productivity as employees were added to meet demand."
The company cited additional pressures in its plastics business, as some customers moved purchases forward in anticipation of higher resin prices, alongside weakness in regional markets, including housing. The cost of PVC resin and other inputs also rose 10%, which the company attributed primarily to global supply-and-demand dynamics for PVC resin. These pressures followed the third quarter of 2025, when plastics revenue fell 13.9% to $110.015 million and net income declined 20.2% to $43.495 million. The company said a 17% decrease in selling prices was the primary driver of the revenue decline at the time. A 4% increase in sales volumes partially offset the effect of lower prices during that period.
In the electric segment, operating revenue fell 2.6% to $134.979 million, while net income rose 0.4% to $27.418 million. The company attributed the revenue decline primarily to lower fuel recovery revenue and production tax credits, and said neither factor affects net income. The total decrease in fuel recovery revenue was $11.9 million. This was partly offset by $5.9 million from rate adjustments in Minnesota and South Dakota, and $2.7 million from recovery of additional investments in the asset base. The company added that favorable weather increased revenue by $2.3 million, helping offset some of the pressures.
The company had $601.8 million in available liquidity on September 30, 2026. This total included $253.3 million in cash and cash equivalents and marketable securities. The company also declared a quarterly cash dividend of $0.5775 per share. The dividend is payable on December 10 to shareholders of record on November 13, 2026. The company is scheduled to hold a live webcast to discuss results and operating performance on November 3 at 10 a.m. Central time.