Raven Industries Inc.
( RAVN) reported fourth quarter 2013 earnings of 30 cents per
share, flat year over but ahead of the Zacks Consensus Estimate
of 25 cents per share.
Sales decreased 7% year over year to $89 million, falling
short of the Zacks Consensus Estimate of $93 million. Higher
sales in the Applied Technology Division was offset by declines
in the remaining two segments- Engineered Films and Aerostar.
Cost of sales decreased 8% year over year to $63 million.
Selling, general and administrative expenses decreased 2% year
over year to $8.5 million. Operating income decreased 7% year
over year to $15.5 million in the quarter.
Sales for the segment increased 18% year over year to $38
million. The segment benefited from Raven's continued investment
in new products, international expansion and strong demand for
its precision agricultural solutions. Operating income increased
40% to $12.3 million from $8.8 million in the prior-year quarter,
attributed to higher sales.
The segment reported sales of $30.8 million, down 14% year over
year. Operating income declined 33% to $4.4 million. Weak energy
markets offset improved agricultural sales and strong demand for
Sales plunged 22% year over year to $23.3 million, due to lower
aerostat sales as well as lower electronics manufacturing
services revenues. The segment reported an operating profit of
$2.8 million, down 48% from the prior-year quarter.
Fiscal 2013 Performance
Raven reported record 2013 earnings of $1.44 per share, up 4%
annually and beating the Zacks Consensus Estimate of $1.39 per
share. Sales increased 6% year over year to a record $406
million, falling short of the Zacks Consensus Estimate of $409
million. Higher sales in the Applied Technology Division and
Engineered Films was offset by decline at Aerostar.
Raven Industries ended fiscal 2013 with cash and cash
equivalents, including short-term investments, of $49.3 million
compared with $25.8 million as of the end of fiscal 2012. Cash
flow from operating activities during fiscal 2013 improved to
$76.4 million from $43.8 million in the prior year.
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. Moreover, Raven is also focusing on increasing the
customer base of Vista both in the domestic and international
Raven 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. Revenues at the
Engineered Films segment will remain affected due to continued
energy market weakness.
Margins in the Applied Technology segment will also be under
pressure due to Raven's increased investments in new initiatives
and the resultant increase in research and development and
selling, general and administrative expenses.
South Dakota-based Raven Industries Inc. is an industrial
manufacturer providing a variety of products for the
agricultural, industrial, construction and military/aerospace
markets. Raven operates through four business segments:
Engineered Films, Electronic Systems, Applied Technology and
Raven currently holds a short-term Zacks Rank #5 (Strong
Sell). Among the other stocks in the same industry,
Macquarie Infrastructure Company LLC
Tyco International Ltd.
) hold a Zacks Rank #2 (Buy) and are favorable options for
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