Otter Tail Corporation (NASDAQ:OTTR) Q2 2019 Earnings Conference Call - Final Transcript
Aug 06, 2019 • 11:00 am ET
Good morning, and welcome to Otter Tail Corporation's Second Quarter 2019 Earnings Conference Call. Today's call is being recorded, and we will hold a question-and-answer session after the prepared remarks.
I will now turn the call over to the Company for the opening comments.
Good morning, everyone and welcome to our call. My name is Loren Hanson, and I manage Otter Tail's Investor Relations area. Last night, we announced our second quarter 2019 earnings results. Our complete earnings release and slides accompanying this call, are available on our website at ottertail.com. A replay of the 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 Kevin Moug, Otter Tail Corporation's Senior Vice President and Chief Financial Officer.
Before we begin, I want to remind you that we will be making forward-looking statements during this call. As noted on slide 2, these statements represent our current judgement or opinion of what the future holds. They are subject to risks and uncertainties that may cause actual results to differ materially. So please be advised about placing undue reliance on any of these statements.
Our forward-looking statements are described in more detail in our filings with the Securities and Exchange Commission, which we encourage you to review. Otter Tail Corporation disclaims any duty to update or revise our forward-looking statements due to new information, future events, developments or otherwise.
For opening remarks, I will now turn the call over to Otter Tail Corporation's President and CEO, Mr. Chuck MacFarlane.
Charles S. MacFarlane
Thank you, Loren. Good morning, everyone. Last night, we released our second quarter results, please refer to slide 5 as I begin my comments. Operating revenues increased slightly quarter-over-quarter, while net income and earnings per share decreased compared to second quarter 2018. Our financial performance is in line with our expectations and we are reaffirming our 2019 guidance range of $2.10 to $2.25.
Our Electric segment quarter-over-quarter earnings decreased mainly due to the planned outage at Coyote Station, unexpected turbine repairs at our Hoot Lake Plant and milder weather. As anticipated, our Plastics segment's second quarter results were lower than 2018, due to lower sales prices on slightly higher volumes. We expect our financial performance for the second half of 2019 to remain in line with our forecast.
Recall, the last half of 2018, included a planned outage at Big Stone Plant, costs associated with the establishment of foundations at Otter Tail Corporation and Otter Tail Power, and the increased expense related to certain tax matters. We don't expect these costs to reoccur in the second half of 2019.
Let's take a closer look at Otter Tail Power. Investments on slide 11, including the Merricourt Wind Energy Center and Astoria Station, along with our Dakota Transmission Reliability project will produce an annual rate base growth of 8.6% between 2018 and 2023, in a constructive regulatory environment. I'll touch briefly on a few of these projects.
On slide 14, you'll see