Otter Tail Corp. CEO announces 2nd quarter gainsPublished 10:59am Wednesday, August 7, 2013
After a strong first quarter earlier this year, Otter Tail Corporation saw further signs of continued success with another quarter of growth, the corporation announced Monday.
With continued growth, president and CEO Jim McIntyre said the corporation is meeting expectations as leaders look for greater returns from its groups.
“Overall, our 2013 second quarter results met our expectation for improved earnings over 2012,” McIntyre said. “The successful realignment of our portfolio has better positioned us for stronger execution within our remaining companies.”
The quarter two net income for the corporation’s groups totaled $7.5 million. Earnings per share totaled $0.21.
Both totals increased from the second quarter of 2012, which saw the figures at $6.9 million and $0.19.
Revenue from group operations also increased from last year’s second quarter, from $211.4 million in 2012 to $212.4 in 2013.
Another quarter of gains has reflected positively on the corporation’s standing in the national business community.
“Our success in significantly reducing risk and stabilizing earnings has also been reflected in a recent upgrade of our corporate credit ratings by Standard and Poor’s for both Otter Tail Corporation and Otter Tail Power Company,” McIntye said. “In addition, Fitch Ratings recently announced a favorable outlook change from negative to stable for both Otter Tail Corporation and Otter Tail Power Company.”
While earnings have increased, the corporation once again witnessed mixed results from its companies.
The corporation’s plastics segment continued to bolster increases in earnings from the previous quarter and last year. Strong sales volumes and margins resulted in higher gains in net income than were expected for the segment, which includes PVC pipe manufacturers Northern Pipe Products and Vinyltech.
Sales volume from the Vinyltech plant in Arizona increased 36 percent over second quarter 2012 sales as a result of improved housing markets in the South Central and Southwest regions of the United States. Northern Pipe Products continues to capitalize on opportunities in the Bakken oil fields.
The corporation’s construction segment, Foley, showed substantial improvement compared to the second quarter of 2012 when it posted sizable losses. Overall, the construction segment provided a slight profit this past quarter.
Manufacturing is down for the corporation, as it was in the first quarter. Earnings dropped 18 percent compared to the second quarter of 2012 as a result of $3.2 million in lower sales. The lower earnings were in line with management’s expectations, however.
The corporation also saw a drop in performance from its electric segment relative to the second quarter of 2012. Despite the lower earnings in the segment, McIntyre said management is still confident in the utility’s ability to deliver earnings. McIntyre suggested the completion of three transmission projects in the CapX2020 expansion is expected to contribute to future earnings.