Otter Tail Corporation Q1 FY2026 earnings call

Leadership transition announced, with Tim Rogelsted elected president and Todd Wallen in new roles. Otter Tail Power achieved constructive outcome in South Dakota rate case, Minnesota rate case progressing with interim rates. Solar projects in early construction, battery storage project targeting 2028. Manufacturing segment seeing improvements in some markets but challenges in agriculture. Plastic segment facing pricing decline but some volume increases

Electric segment earnings increased 25 cents per share, or 43%, in the first quarter, driven by increased electric rates and the recovery of rate-based investments. Manufacturing segment earnings increased six cents per share, driven by higher margins, primarily from a favorable product mix. Increased sales volumes and improved production efficiency also contributed. Plastic segment earnings decreased 24 cents per share, or 24%, primarily due to lower sales prices of PVC pipe

Maintain diluted earnings per share guidance range of $5.22 to $5.62. Affirm five-year capital spending plan for electric segment totaling $1.9 billion with 10% compounded annual growth rate

Impact of Iranian situation on resin prices, manufacturing market uncertainties, pipeline project permitting and tax issues, interest rate changes

Q: Given the Iranian situation, does that alter your expectations for what sort of the global resin dynamics will be, or are you sort of thinking that that gets resolved before the second half of the year?

A: We believe it is impacting the U.S. domestic export price of resin, which drives up the domestic price at this time, not sure if resolved by second half of year.

Q: What is driving in manufacturing sort of the recovery in recreational vehicle market dynamics, given negative consumer sentiment this year?

A: Inventory levels normalized, mid and higher-end models seeing pickup in demand.

Q: In the pipeline slide, did that letter of intent customer slide back into the broader pipeline, or did they just give up altogether?

A: Continue to work with that customer, not currently in pipeline but may come back.

Q: Can you give us any update on the Minnesota rate case process? What's the next big hurdle?

A: In middle of discovery, next step is expecting intervener testimony in second quarter.

Q: There's been a decent run up in interest rates lately. Do you expect to make any adjustments to the case for what we're seeing today?

A: Don't expect adjustments as debt issuance already factored in