Otter Tail Corporation (OTC) reported a net income of $275.9 million, or $6.55 per diluted share, for the fiscal year ending December 31, 2025, reflecting an 8.5% decrease from the previous year's net income of $301.7 million, or $7.17 per diluted share. The decline in earnings was primarily attributed to a decrease in sales prices within the Plastics segment, which saw a 15% drop in average prices for PVC pipe products. Operating revenues for the year totaled $1.304 billion, a slight decrease of 2% from $1.331 billion in 2024. The Electric segment, however, experienced a 7% growth in earnings, driven by increased sales volumes and recovery of rate base investments.
In terms of operational metrics, the Electric segment served approximately 134,000 customers across more than 400 communities in western Minnesota, eastern North Dakota, and northeastern South Dakota. The segment's retail electric revenues increased by 6.8% to $484 million, supported by favorable weather conditions that contributed to a 4.2% rise in retail kilowatt-hour sales. The Manufacturing segment's revenues decreased by 8.2% to $314.5 million, impacted by soft demand in key end markets, while the Plastics segment reported revenues of $422.8 million, down 8.8% from the previous year.
Strategically, OTC has been focusing on capital investments in its Electric segment, with total capital expenditures of $288 million in 2025, down from $359 million in 2024. The company is also actively pursuing renewable energy projects, including the acquisition of solar facility assets and upgrades to existing wind energy facilities, which are expected to enhance its generation capacity and qualify for production tax credits. The company anticipates that industry conditions in the PVC pipe market will normalize through 2027, which may lead to a moderation in earnings and cash flow from the Plastics segment.
As of December 31, 2025, OTC maintained a strong liquidity position with total available liquidity of $705.5 million, including $386.2 million in cash and cash equivalents. The company employed 2,198 full-time employees, with a focus on employee safety and engagement. OTC's long-term financial objectives include achieving a compounded annual growth rate in earnings per share of 7% to 9% and targeting annual dividend increases of 6% to 8%. The company remains committed to its diversified business model, which includes electric utility operations and manufacturing segments, to drive future growth and shareholder returns.
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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