Shares of Otter Tail experienced a significant increase as the company raised its 2023 earnings guidance while also reporting stronger-than-expected earnings for the third quarter.
Positive Market Reaction
In midday trading, the stock surged by 10% to reach $76.71, reflecting the investor enthusiasm. Overall, the shares have witnessed substantial growth, with a year-to-date increase of more than 30%.
Revised Earnings Forecast
Otter Tail, which serves as a holding company for energy and infrastructure businesses, has revised its earnings forecast for the year. The anticipated earnings per share (EPS) range has been adjusted to $6.76 to $6.96 from the previous forecast of $5.70 to $6.00.
Driving Factors
Chief Executive Chuck MacFarlane attributed the upward revision of earnings guidance to the exceptional performance of the company's plastics business. The robust earnings in this sector have played a significant role in shaping the improved forecast.
Strong Q3 Results
For the third quarter, Otter Tail reported earnings per share of $2.19. This represents growth from the $2.01 per share reported in the same quarter of the previous year. The results surpassed initial expectations, as analysts surveyed by FactSet had predicted earnings of only $1.62 per share.
Revenue Analysis
Although quarterly revenue declined to $358.1 million from $383.9 million in the previous year, it surpassed analyst forecasts of $335.7 million, as reported by FactSet.
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