Raven Falls Short of Estimates - Analyst Blog
2012年11月23日 - 9:43PM
Zacks
Raven Industries Inc. (RAVN) reported third
quarter 2013 earnings of 30 cents per share, down 3% from 31 cents
in the year-ago quarter and missed the Zacks Consensus Estimate of
34 cents per share.
Operational Update
Sales increased 4% year over year to $97 million, falling
short of the Zacks Consensus Estimate of $102 million. The
year-over-year increase in sales was attributable to growth in the
Applied Technology Division and contribution from Vista Research in
the Aerostar Division.
Cost of sales increased 2% year over year to $67 million.
Selling, general and administrative expenses increased 23% year
over year to $9.7 million. Operating income decreased 3% year over
year to $16.4 million in the quarter.
Segment Performance
Applied Technology: Sales for the segment increased
11% year over year to $39 million. The segment benefited from the
company’s continued investment in new products as well as
international expansion. Operating income increased 6% to $12.3
million from $11.5 million.
Engineered Films: The segment reported sales of $33.3 million,
down 5% year over year. Operating income declined 15% to $4.7
million. A decline in energy and agricultural sales offset improved
demand for construction films.
Aerostar: Sales increased 9% year over year to $26 million,
primarily driven by the addition of Vista Research revenues
(acquired in January 2012). The segment reported an operating
profit of $3.8 million, up 20% from the prior-year quarter.
Financial Position
Raven Industries ended the quarter with cash and cash
equivalents, including short-term investments, of $48 million
compared with $44.1 million as of the second quarter. Cash flow
from operating activities during the first nine months of fiscal
2013 improved to $58 million from $37.7 million in the prior year
comparable period.
Our Take
Raven’s Engineered Films segment continues to benefit from
strong demand for geo membrane films. Demand for geo membrane
films, meant for environmental protection, is on the rise as
customers are keen on protecting water and other environmental
resources for a sustainable future. This will provide a boost to
Raven Industries’ revenues moving ahead.
Vista Research, which Raven acquired in January 2012, has high
growth potential and continues to boost revenues of the Aerostar
segment. Vista Research has recently signed a new $6 million
contract with the U.S. government to support and further explore
the applications of its radar technology. Moreover, the company is
also focusing on increasing the customer base of Vista both in the
domestic and international markets.
Raven will benefit from the current strength in the
agriculture market. The company continues with its strategy of
investing significantly in research and development, thereby,
helping it to maintain strong financial results. In addition, Raven
has ample scope to fund future growth and increase dividends with
the support of debt-free balance sheet and solid cash flow.
However, the near-term results of the Aerostar segment will be
affected by the lack of aerostat orders.
South Dakota-based Raven Industries Inc. is an industrial
manufacturer providing a variety of products for the agricultural,
industrial, construction and military/aerospace markets. The
company operates through four business segments: Engineered Films,
Electronic Systems, Applied Technology and Aerostar. Graco
Inc. (GGG) and Spartech Corp. (SEH) are
peers of Raven. The company currently retains a Zacks #4 Rank
(short-term Sell rating).
GRACO INC (GGG): Free Stock Analysis Report
RAVEN INDS INC (RAVN): Free Stock Analysis Report
SPARTECH CORP (SEH): Free Stock Analysis Report
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