Otter Tail Corporation (OTC) reported a decrease in financial performance for the third quarter of 2025, with total operating revenues of $325.6 million, down 3.7% from $338.0 million in the same period last year. The decline was attributed to reduced sales prices in the Plastics segment and decreased sales volumes in the Manufacturing segment, partially offset by increased sales volumes and fuel recovery revenues in the Electric segment. Net income for the quarter was $78.3 million, a decrease of 8.4% compared to $85.5 million in the prior year, resulting in diluted earnings per share of $1.86, down from $2.03.
In the nine months ending September 30, 2025, total operating revenues also fell to $996.0 million from $1.0 billion in the previous year, reflecting a 3.1% decrease. The Electric segment saw an increase in retail revenues, which rose by 7.1% to $355.1 million, driven by higher fuel recovery revenues and favorable weather conditions. However, the Manufacturing and Plastics segments experienced significant revenue declines, with the Manufacturing segment's revenues dropping 14.0% and the Plastics segment's revenues decreasing by 6.9%.
Operationally, OTC's Electric segment reported a 5.3% increase in retail kilowatt-hour sales, while wholesale sales volumes surged by 124%. The Manufacturing segment faced challenges with an 8% decrease in sales volumes across various end markets, attributed to soft demand and inventory management. The Plastics segment reported a 17% decrease in sales prices, although sales volumes increased by 4% due to expanded production capacity. The company’s total employee headcount remained stable, reflecting ongoing operational adjustments.
Strategically, OTC has been active in regulatory matters, filing for rate increases in both South Dakota and Minnesota to recover costs associated with capital investments and operational expenses. The company is also navigating ongoing legal challenges related to antitrust allegations in the PVC pipe market, which could impact its financial position. Looking ahead, OTC anticipates continued pressure from macroeconomic factors, including inflation and potential changes in trade policies, which may affect its capital expenditures and overall financial performance. The company remains committed to its capital investment plans, with projected expenditures of $321 million for 2025, focusing on electric generation and distribution improvements.
About Otter Tail Corp
Otter Tail Corporation is a diversified holding company primarily engaged in electric utility operations, manufacturing, and plastics production. Its core business includes serving approximately 134,000 electric customers in the Midwest, manufacturing metal and plastic products for various industries, and producing PVC pipes for water and wastewater systems. The company emphasizes renewable energy, regulatory compliance, and long-term growth through rate base investments and organic expansion.
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