The following is a summary of the Otter Tail Corporation (OTTR) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Q3 earnings per share decreased by 7% to $2.03 compared to Q3 2023 but year-to-date earnings exceeded last year by 4%.

• Electric segment earnings increased by 16% or $4 million primarily due to interim rates in North Dakota and a FERC ruling on transmission return on equity.

• Plastics segment earnings decreased by 8% due to declining PVC pipe sales prices but outperformed expectations for Q3.

• Manufacturing segment earnings decreased by 71% due to lower sales volumes across multiple markets.

Business Progress:

• Otter Tail Corporation is expanding its capital spending, primarily aimed at renewable generation, transmission investment, and technology upgrades.

• The company mentioned significant upcoming investments in Advanced Metering Infrastructure and wind repowering projects, expected to lower operational costs and customer bills due to tax credits and incremental energy output respectively.

• In manufacturing, BTD's expansion in Georgia is on track and set to support additional annual revenue.

Opportunities:

• The company is growing its earnings, with a five-year compounded annual growth rate projected to exceed the long-term target. This growth is partly driven by investments in renewable generation, transmission, and technology which provide opportunities for retaining competitive rates even with substantial capital expenditures.

Risks:

• The manufacturing sector faces ongoing demand-related challenges, impacting sales volumes and profitability. Moreover, the declining prices of PVC pipe are expected to continue, potentially reducing the profitability of the Plastics segment over time.

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