Raven Industries Inc.
) is scheduled to announce its third quarter fiscal 2013 results
on November 20, 2012. The current Zacks Consensus Estimate for
the quarter is 34 cents, projecting a year-over-year growth of
10%. The Zacks Consensus Revenue Estimate is $102 million for the
quarter under discussion.
With respect to earnings surprise, Raven has outperformed the
Zacks Consensus Estimate in three of the last four quarters. The
average earnings surprise was 9.13%, implying that the company
has surpassed the Zacks Consensus Estimate by the same magnitude
over the same period.
Previous Quarter Recap
Raven Industries' second quarter 2013 earnings per share
decreased 3% year over year to 32 cents per share, falling short
of the Zacks Consensus Estimate of 38 cents. Results were
affected by continued volatility in the Aerostar
Revenues in the quarter were $101.7 million, up 13% from the
year-ago period. Revenues marginally missed the Zacks Consensus
Estimate of $102 million. The year-over-year upside in sales was
attributable to the double-digit growth across all segments.
Estimate Revision Trend
For the third quarter as well as fiscal 2012, there has been
no movement in estimates over the 30 days as well as in the past
7 days. The lack of movement suggests that the analysts do not
expect any major catalyst driving the quarter's results.
Magnitude of Estimate Revisions
The consensus earnings estimate for the third quarter of
fiscal 2012 has remained at 34 cents over the past 90 days. For
fiscal 2013, the estimate has gone down by 6 cents to $1.51
following the second quarter results. The estimate has remained
at $1.51 since then.
In the last quarter, sales and operating income in Raven's
Engineered Films segment were record high, driven by high demand
for the 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. 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.
In addition, Raven aims at enhancing its product portfolio to
increase its market share in the industry. The company introduced
many new products in the applied technologies segment and has
decided to further invest in product development in this segment
in fiscal 2013 to meet the increasing demand of its
On the flipside, increased capital spending will put pressure
on margins moving forward. Moreover, R&D expenses in the
Applied Technology and Aerostar division are also projected to
increase. But its margins would remain constrained due to drought
conditions in the U.S. The company currently retains a Zacks #3
Rank (short-term Hold rating).
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
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