On Oct. 30, mini-conglomerate Otter Tail
- The lower earnings came mainly from a slow performance from the mainstay electric generation segment. Impressive operating results from plastics, manufacturing, and "other operations" (such as flatbed trucking, natural gas marketing, and electrical construction) couldn't quite overcome weaknesses in the other sectors.
- The Midwest Independent Transmission System Operator (MISO) power exchange system -- through which Otter Tail Power sells its generated electricity -- has been in operation for nearly two years now, becoming more efficient in the process. That's a major driver of the operating margin drop, because capacity is more efficiently managed across the selling region and Otter Tail has fewer unexpected shortfalls to fill.
- The company continues to operate off a cash-poor and leverage-rich balance sheet, but at least there's some cash on the books these days. I'd love to see the cash flow statement, but no such luck this time.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q3 2006 |
Q3 2005 |
Change |
|
|---|---|---|---|---|
|
Sales |
$279,000 |
$280,542 |
$261,187 |
7.4% |
|
Net Profit |
-- |
$13,476 |
$19,168 |
(29.7%) |
|
EPS |
$0.45 |
$0.45 |
$0.65 |
(30.8%) |
|
Diluted Shares |
29804.9 |
29441.4 |
1.2% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
33.85% |
28.83% |
5.02 |
|
Operating Margin |
8.62% |
12.82% |
(4.20) |
|
Net Margin |
4.80% |
7.34% |
(2.54) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$7,999 |
$0.0 |
N/A |
|
Accounts Rec. |
$140,020 |
$132,612 |
5.6% |
|
Inventory |
$106,601 |
$83,361 |
27.9% |
|
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$115,118 |
$74,324 |
54.9% |
|
Long-Term Debt |
$256,223 |
$258,981 |
(1.1%) |
Learn the ways of the balance sheet.
Segment Scrutiny
Otter Tail is so diverse that it's almost impossible to discuss the company without mentioning the various divisions. Here's a close-up look at their individual performances.
|
Revenues |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Electrics |
71,206 |
85,770 |
(17%) |
|
Plastics |
45,941 |
45,462 |
1.1% |
|
Manufacturing |
76,667 |
59,803 |
28.2% |
|
Health Services |
35,432 |
30,653 |
15.6% |
|
Food Ingredient Processing |
11,474 |
9,808 |
17% |
|
Other Operations |
40,739 |
30,805 |
32.2% |
|
Operating Income |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Electrics |
11,647 |
25,788 |
(54.8%) |
|
Plastics |
7,792 |
5,175 |
50.6% |
|
Manufacturing |
5,944 |
2,739 |
117% |
|
Health Services |
749 |
2,087 |
(64.1%) |
|
Food Ingredient Processing |
(1,602) |
558 |
N/A |
|
Other Operations |
(360) |
(2,868) |
87.4% |
Cash Flow Highlights
No cash flow statement provided at this time. Bummer, dude.
Find out why Fools always follow the money.
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At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here .
