Earnings Preview: Raven Industries - Analyst Blog
March 12 2012 - 2:27PM
Zacks
Raven industries, Inc. (RAVN)
is scheduled to report its fourth quarter and year end 2011
financial results before the market opens on March 13, 2012. The
current Zacks Consensus Estimate for the quarter is pegged at 48
cents per share, representing an estimated year-over-year increase
of about 17.1%. Revenue, as per the Zacks Consensus Estimate stands
at $78 million.
Third Quarter Synopsis
Raven’s third quarter earnings per share came in at 63 cents, in
line with the Zacks Consensus Estimate. Earnings, however, dropped
35% from the year ago 65 cents per share.
Net revenue for the quarter came in at $93 million, up 8.7% from
$86 million in the year-ago quarter. This also came in line with
the Zacks Consensus Estimate.
Raven Industries, which competes with Graco
Inc. (GGG) and Spartech Corp. (SEH),
despite registering a growth in its top line, experienced a drop in
the bottom line due to an 8% increase in the cost of sales and 45%
increase in selling, general and administrative expenses.
Agreement of Estimate Revisions
Only 1 analyst is covering the stock and he has neither upgraded
nor downgraded fourth quarter estimates in the last 30 days. Fiscal
2011 estimates remained the same. The absence of estimate revisions
indicates that the analyst does not perceive any major catalyst
driving the quarterly results.
Magnitude of Estimate Revisions
The Zacks Consensus Estimates for the fourth quarter and fiscal
2011remained the same over the last 7 days.
Earnings Surprise
With respect to earnings surprises, Raven has performed in line
and has also topped the Zacks consensus Estimate over the trailing
four quarters. The average earnings surprise was a positive 22.23%.
This implies that the company has beaten the Zacks Consensus
Estimate by the same magnitude over the last four quarters.
Our Take
The Applied Technology and Engineered Films division are both
experiencing strong sales momentum over the quarters. Sales in the
Aerostar division dropped in the third quarter of 2011. However,
the new contract of $6 million received in September is expected to
deliver better performance in the fourth quarter of the year.
Soaring costs, however, remain a problem for the company.
Currently, Raven holds a Zacks #3 Rank, which implies a
short-term “Hold” rating. However, our long-term recommendation on
the stock remains Outperform due to the better performance in the
third quarter of 2011 and promising outlook.
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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