Q1 2024 Otter Tail Corp Earnings Call Transcript
Key Points
- Diluted earnings per share increased nearly 20% to $1.77 per share compared to the same time last year.
- Plastics segment earnings increased 39% from the first quarter of 2023 due to higher sales volumes driven by customer sales, volume growth and strong distributor and end market demand.
- Otter Tail Corp is increasing its 2024 earnings guidance by $1.10 per share to a range of $6.23 to $6.53, reflecting stronger than expected performance in the Plastics segment.
- Otter Tail Power announced a significant 5-year capital spending plan focusing on renewable resources, transmission investment, and technology, expected to produce a rate base growth of 7.7%.
- Advanced metering infrastructure project with a total investment of approximately $60 million is expected to reduce operating expenses through lower meter-reading costs and technology-enabled savings.
- Electric segment earnings decreased modestly, primarily driven by weather-related headwinds.
- Manufacturing segment earnings decreased 23% due to lower sales volume.
- Compliance with new EPA regulations under Section 111b of the Clean Air Act could potentially impact operations, although it is anticipated that the regulation will be legally challenged.
- Sales volumes in the manufacturing segment are expected to remain lower in the first half of 2024, with a forecasted rebound later in the year.
- PVC pipe sales prices declined more rapidly than the cost of resin and other input materials, resulting in lower spreads and margin compression in the Plastics segment.
Good morning, and welcome to Otter Tail Corporation First Quarter 2024 earnings conference call. Today's call is being recorded, and we will hold a question-and-answer session after the prepared remarks. I'll now turn the call over to company for their opening comments.
Good morning, everyone, and welcome to our first quarter 2024 earnings conference call. My name Beth Eiken, and I'm Otter Tail Corporation's Manager of Investor Relations. Last night, we announced our first quarter financial results. Our complete earnings release and slides accompanying this call are available on our website at OtterTail.com. Our 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 President and CEO; and Todd Wahlund, 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,
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