Otter Tail Corporation announces strong first quarter earningsPublished 11:01am Thursday, May 9, 2013
The numbers are in for the year’s first quarter at Otter Tail Corporation. Thanks to an unexpected increase in sales volume for the corporations plastics segment, officials are happy with their gains.
“We are pleased with our 2013 first quarter results,” said Otter Tail Corporation President and CEO Jim McIntyre. “We have continued the execution of our strategy to reduce the number of platforms and operating companies. Our initiatives to drive operational excellence and improved financial performance within this much tighter and stronger portfolio of companies are beginning to pay off.”
The consolidated income from the corporation’s group of companies totaled $15.2 million at $0.41 per share. Those numbers are both up from $10.2 million and $0.28 per share for the first quarter of 2012.
When figured with earnings from continuing and discontinued operations, net income and diluted earnings totaled $15.4 million and $0.41 per share. Consolidated revenues from continuing operations were $218 million compared with $219.9 million in the first quarter of 2012.
The corporation’s electric segment performed well in the quarter thanks to favorable weather conditions.
“Earnings from our electric segment met our expectations as a result of more seasonally normal weather in the first quarter compared with the unusually mild winter of 2012,” McIntyre said. “Net income for the electric segment was up 8.3% over 2012 as a result of the impact of the weather on sales and increased revenues from returns on investments.”
Outside of electric earnings, other segments of the corporation had mixed results.
The plastics segment, which includes PVC pipe manufacturers Northern Pipe Products and Vinyltech experienced higher sales volumes and net income than expected. With housing markets showing signs of improvement in the South Central and Southwest regions of the country, the Vinyltech plant in Arizona increased its sales volume by 11.1 percent. Northern Pipe Products in Fargo also increased their sales volume by two percent, despite a harsh winter.
In the construction segment, however, Foley, the corporations mechanical and prime contractor on industrial projects, had a $3.1 million reduction in losses quarter over quarter. Despite changes in its internal bidding and estimating project review procedures, adverse weather throughout the Midwest resulted in delays and higher project costs for Aevenia, the corporations electrical contractor. Despite stronger execution by Foley, the construction segment’s first quarter fell short of expectations.
Earnings in the Manufacturing segment decreased slightly as well. Revenues had decreased 10.5 percent from the first quarter of 2012, but were only down 4.2 percent this quarter. While they were lower than the first quarter in 2012, earnings were in line with expectations.
“Based on continued strong results from our plastic pipe companies, we are adjusting our earnings guidance by segment but reaffirming our overall guidance for 2013 diluted earnings per share from continuing operations of $1.30 to $1.55.,” McIntyre said. “With a solid first quarter behind us, we remain confident we are on course and on strategy for the year.”