Otter Tail Reports Quarterly Earnings: A Deeper Dive into Results
Strong Earnings but Revenue Misses Expectations
Otter Tail (OTTR) reported quarterly earnings of $2.03 per share, surpassing the Zacks Consensus Estimate of $1.97 per share. However, this reflects a decrease from the earnings of $2.19 per share reported for the same period last year. These figures have been adjusted for non-recurring items.
This quarterly performance results in an earnings surprise of 3.05%. Just a quarter ago, analysts expected Otter Tail to report earnings of $1.76 per share, but the company delivered $2.07 instead, achieving a surprise of 17.61% during that period.
Over the past year, Otter Tail has exceeded consensus EPS estimates three times out of four.
Revenue Decline Raises Questions
The company, which is part of the Zacks Utility – Electric Power industry, reported revenues of $338.03 million for the quarter ending September 2024. This figure fell short of the Zacks Consensus Estimate by 6.67% and represents a decline from revenues of $358.06 million a year ago. Notably, Otter Tail has only topped consensus revenue estimates once in the last four quarters.
The future performance of Otter Tail’s stock will largely hinge on insights shared by management during the upcoming earnings call, which will provide clarity on earnings expectations moving forward.
Since the start of 2024, Otter Tail shares have dropped about 8.1%, while the S&P 500 has seen a rise of 20.1%.
Looking Ahead: What’s Next for Otter Tail?
Despite underperforming compared to the market this year, many investors are left wondering what lies ahead for Otter Tail. While there are no straightforward answers, monitoring the company’s earnings outlook can provide valuable insights.
The current consensus earnings expectations for upcoming quarters are indicative of future stock movement. Research indicates a close connection between stock performance and trends in earnings estimate revisions. Investors can either track these revisions or use the Zacks Rank rating tool, which has proven effective in leveraging earnings estimate changes.
Before this earnings release, Otter Tail’s estimate revisions trend appears favorable. Although revisions may shift following the latest earnings report, this positive status has earned the stock a Zacks Rank of #2 (Buy), suggesting an anticipated outperformance compared to the market in the near term. A complete list of Zacks #1 Rank (Strong Buy) stocks is available for interested investors.
It is worth noting that estimates for the upcoming quarters and fiscal year may fluctuate following this release. Currently, the consensus EPS estimate stands at $1.20 on $312.3 million in revenue for the next quarter, and $7.01 with $1.36 billion in revenue for the entire fiscal year.
Investors should also consider the broader industry outlook, as it can significantly affect the stock’s performance. The Utility – Electric Power sector currently ranks in the top 38% among over 250 Zacks industries. Research indicates that the top half of Zacks-ranked industries tend to outperform the bottom half by more than two to one.
Upcoming Reports: Industry Peers in Focus
Another player in the same sector, NRG Energy (NRG), has yet to disclose its quarterly results for the period ending September 2024, with an announcement slated for November 8. NRG is projected to report earnings of $1.71 per share, reflecting an increase of 5.6% from the previous year. The EPS estimate has remained stable over the past month. In terms of revenue, NRG is expected to report $5.43 billion, indicating a 31.7% decline compared to the same quarter last year.
Stock Insights and Future Potential
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This particular company targets millennial and Gen Z markets, producing nearly $1 billion in revenue last quarter alone. Recent price corrections suggest that now might be an ideal opportunity to invest. While not every recommendation is guaranteed, this stock could outperform previous high-flying Zacks’ selections, such as Nano-X Imaging, which surged by 129.6% in less than nine months.
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Otter Tail Corporation (OTTR) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
