Otter Tail Corporation Reports Decrease in Revenue and Net Income for Q2 2025

Otter Tail Corporation reported its financial results for the second quarter of 2025, revealing a decrease in both operating revenues and net income compared to the same period in 2024. For the three months ended June 30, 2025, the company generated operating revenues of $333.0 million, down 2.7% from $342.3 million in the prior year. Net income for the quarter was $77.7 million, a decline of 10.7% from $87.0 million in the same quarter last year. The decrease in revenues was primarily attributed to lower sales volumes in the Manufacturing segment and reduced sales prices in the Plastics segment, although these were partially offset by increased fuel recovery revenues in the Electric segment.

In terms of operational performance, the Electric segment saw a revenue increase of 14.1% to $128.7 million, driven by higher retail and wholesale revenues, as well as increased fuel recovery revenues. The Manufacturing segment, however, experienced a significant revenue drop of 18.6% to $78.7 million, largely due to a 9% decrease in sales volumes across key markets. The Plastics segment also reported a revenue decline of 5.4% to $125.6 million, primarily due to a 15% decrease in sales prices, despite an 11% increase in sales volumes.

The company’s total operating expenses rose to $235.6 million, an increase of 1.8% from the previous year, driven by higher purchased power and fuel costs, as well as increased operating and maintenance expenses in the Electric segment. Interest expenses also increased by 14.9% to $11.7 million, reflecting the impact of new long-term debt issued during the year. The effective tax rate for the quarter was 14.9%, down from 19.2% in the prior year, primarily due to increased production tax credits associated with wind and solar generation.

Looking ahead, Otter Tail Corporation is focused on strategic developments, including a recent request for a revenue increase in South Dakota, which could potentially add $5.7 million to annual revenues if approved. The company is also navigating regulatory changes and market conditions that could impact its operations, particularly in the Electric segment. As of June 30, 2025, Otter Tail had total assets of $3.77 billion and total liabilities of $1.99 billion, reflecting a solid financial position to support its ongoing operations and capital investments. The company remains committed to its capital expenditure plans, which include investments in electric generation and distribution facilities, as well as manufacturing capabilities.