Otter Tail Corporation conducts diversified operations in five segments: Electric, Plastics, Manufacturing, Health Services and Other. Electric includes the production, transmission, distribution and sale of electric energy in Minnesota, North Dakota and South Dakota. Plastics consists of businesses producing polyvinyl chloride pipe in the Upper Midwest and Southwest regions of the United States.

Highlights

First quarter revenues of $300.2 million.

Consolidated net income of $8.2 million for the first quarter of 2008 compared with $10.4 million for the first quarter of 2007.

Diluted earnings per share of $0.27 for the first quarter of 2008 compared with $0.34 for the first quarter of 2007. 
Announcements

On April 14, 2008 the Board of Directors declared a quarterly common stock dividend of 29.75 cents per share payable June 10, 2008 to shareholders of record on May 15, 2008.

The Board also declared quarterly dividends on the corporation's four series of preferred stock, payable May 31, 2008 to shareholders of record on May 15, 2008.

On April 30, 2008 Otter Tail Power Company announced plans to invest $121 million related to the construction of 48 megawatts of wind energy generation at the proposed Ashtabula Wind Center site in Barnes County, North Dakota.

On May 1, 2008 BTD Manufacturing, Inc. (BTD) acquired the assets of Miller Welding & Iron Works, a custom job shop fabricator and finisher located in Washington, Illinois, for cash.

The corporation is revising its 2008 diluted earnings per share guidance to be in the range of $1.75 to $2.00 from its previously announced range of $1.85 to $2.10. 
CEO Overview

"After two consecutive years of record earnings from our nonelectric businesses, the first quarter of 2008 presented challenges that caused results to fall below our expectations," said John Erickson, president and chief executive officer of Otter Tail Corporation. "Although some of our companies fell short of expectations in the first quarter, we still anticipate solid performance in 2008 for the corporation overall. Given the first quarter results and uncertainty with economic conditions for the balance of the year, we are revising earnings per share guidance to a range of $1.75 to $2.00 from our initial range of $1.85 to $2.10."

Erickson noted that quarterly results in health services and manufacturing were disappointing. "Results in health services were primarily affected by lower than expected asset utilization rates in the imaging business. The lower manufacturing results were primarily due to a significant adjustment in the profitability of a wind tower order at DMI Industries' Ontario plant and from lower margins at ShoreMaster. The remaining manufacturing businesses produced solid results, and we expect DMI-and our manufacturing segment as a whole-will have record earnings in 2008."

Erickson pointed to positive performance within the corporation's food ingredient processing segment and at the electric utility. "Our diversification strategy allows us to balance risk more effectively and weather economic swings within specific industries, and there were definite achievements this quarter. Earnings from our food ingredient processing segment were higher than the same quarter a year ago, continuing a trend over the last six quarters. Otter Tail Power Company showed improvement over the prior year, due in part to colder weather and an interim rate increase in Minnesota."