Zacks Industry Outlook Highlights: The Empire District Electric Company, Otter Tail Corporation, American Electric Power Company, Constellation Energy Group and Duke Energy Corporation

Zacks

For Immediate Release

Chicago, IL – July 27, 2011 – Today, Zacks Equity Research discusses the Alternative Energy, including The Empire District Electric Company (NYSE:EDE - News), Otter Tail Corporation (NasdaqGS:OTTR - News), American Electric Power Company Inc. (NYSE:AEP - News),  Constellation Energy Group Inc. (NYSE:CEG - News) and Duke Energy Corporation (DUK).

 

A synopsis of today’s Industry Outlook is presented below. The full article can be read at 
http://www.zacks.com/stock/news/57760/Alternative+Energy+Stock+Outlook+–+July+2011

Zacks expects above-average economic growth to resume in the second half of the year. Driving this growth resumption will be the removal of the temporary restraints that kept the economy in check in the first half. The impact of Japan related supply-chain disruptions, particularly on the U.S. auto sector, has been well documented. As normal industrial operations resume, we should start seeing its impact in manufacturing centric reports.

The macroeconomic improvement should have a beneficial impact on electricity demand. According to the Energy Information Administration (AMEX:EIA - News), U.S. industrial electricity sales are expected to rise year-over-year by 3.6% in 2011 and 2.0% in 2012. This helps improve the operating environment of electricity generators and distributors.

A number of traditional utility companies have growing alternative energy operations. But the fortunes of some of these companies, particularly those with significant fossil-fuel exposures, are less attractive than their peers.

In the utilities space, we are less optimistic about the prospects of The Empire District Electric Company (EDE), Otter Tail Corporation (OTTR) and American Electric Power Company Inc. (AEP).

Conversely, favorable rate cases and stable sales growth in the respective service areas make companies like Constellation Energy Group Inc. (NYSE:CEG - News) and Duke Energy Corporation (DUK) attractive.

Like everyone else, the Alternative Energy industry was hit hard by the Great Recession and essentially remains in recovery mode. And while the economy is in recovery mode, so is our hope for the industry.

A major growth area in this space is Solar Energy. The U.S. has a lot of catching up to do, despite enormous potential, to get anywhere close to the global leaders. According to the Solar Energy Industries Association (:SEIA) -- the U.S. trade association of close to 1,000 companies in the solar energy industry -- in fiscal 2010, the U.S. installed 887 MW of grid-connected photovoltaics (:PV), representing 104% growth over the 435 MW installed in fiscal 2009.

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