Raven Matches Zacks Estimates - Analyst Blog
November 23 2011 - 7:28AM
Zacks
Raven Industries Inc. (RAVN) delivered
earnings of 63 cents per share in its fiscal third quarter 2012
ended July 31, 2011, at par with the Zacks Consensus Estimate but
declining 3% from the 65 cents earned in the year-ago quarter.
Operational Update
Sales increased 8.7% y/y to $93 million, at par with the Zacks
Consensus Estimate. The outperformance was driven by 36% sales
growth at Applied Technology and 17% at Engineered Films. However,
revenues at Electronic Systems and Aerostar were a partial
offset.
Cost of sales increased 8% year over year to $66 million in the
quarter under review. Selling, general and administrative expenses
increased 45% year over year to $7.9 million. Operating income
declined 6% year over year to $16.9 million in the quarter.
Segmental Performance
Applied Technology: The segment delivered
record sales and profit in the quarter under review. Sales surged
36% year over year to $32.5 million in the quarter. Operating
income was $10.7 million, an increase of 45% year over year. The
performance was driven by continued demand for the company's
precision agriculture solutions. International sales also remained
strong during the quarter.
Engineered Films: The segment posted the
all-time high quarterly sales delivering a 17% year-over-year
increase to gross $34.9 million in the reported quarter. However,
operating income declined 19.5% year over year to $5.6 million due
to delays in ramping up new capacity.
Aerostar: Sales decreased 34% year over year to
$10.5 million in the quarter. Operating income of the segment
dropped 50% over the prior year period to $1.8 million.
During the quarter, sales of parachutes led the top-line
improvement.
Electronic Systems: The segment reported a 3%
year over year decline in sales grossing $17.3 million in the
quarter. Operating income of $2.3 billion remained flat year over
year.
Financial Position
Raven Industries ended the quarter with cash and cash
equivalents including short-term investments of $44.2 million,
lower than $47 million at the end of the second quarter 2012.
Cash provided by operating activities during the first nine months
of 2012 improved to $44.2 million from $30 million in the year ago
period.
Our Take
Raven’s two largest divisions - Applied Technology and Applied
Technology are experiencing strong sales momentum, driven by
Raven’s aggressive investment programs related to new products and
capacity expansion. The company continues to make significant
investment over the past few years in building its international
sales which will boost its revenues.
Further, Raven’s debt-free balance sheet and solid cash flow
characteristics provide the scope to fund future growth and
increase dividends. The quantitative Zacks #3 Rank (short term
Neutral rating) for Raven Industries indicates no clear directional
pressure on the stock over the near term.
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 the two
close competitors of Raven.
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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