Trimble's results look promising for Raven. Yet there is a lot of new overhead to absorb at Raven.
Excerpted from Trimble's PR.
Fourth quarter 2012 Field Solutions revenue was $108.1 million, up 13 percent as compared to the fourth quarter of 2011 due primarily to increased sales of agricultural products.
Fourth quarter 2012 Field Solutions operating income was $37.1 million, or 34.3 percent of revenue, as compared to $34.1 million, or 35.7 percent of revenue, in the fourth quarter of 2011. Non-GAAP operating income was $37.9 million, or 35.1 percent of revenue, as compared to $34.7 million, or 36.3 percent of revenue, in the fourth quarter of 2011. Non-GAAP operating margin was down primarily due to product mix in Geographical Information System (GIS) sales.
Fiscal 2012 Field Solutions revenue was $482.0 million, up 16 percent as compared to fiscal 2011 due primarily to increased sales of agricultural products.
Fiscal 2012 Field Solutions operating income was $182.1 million, or 37.8 percent of revenue, as compared to $160.1 million, or 38.7 percent of revenue, in fiscal 2011. Fiscal 2012 non-GAAP operating income was $184.9 million, or 38.4 percent of revenue, as compared to $162.4 million, or 39.3 percent of revenue, in fiscal 2011. Non-GAAP operating margins were down primarily due to product mix in GIS sales.
Tuesday morning before the open we will see how Raven did last quarter. I think I said it before, but I don't really expect any great increase in EPS. Last year's 4th quarter was particularly strong and a lot more overhead has been added during this year, so $.31 I would find to be very encouraging.
Yes, I remember saying that comparisons really can't be expected to be great until 3rd quarter of the upcoming fiscal year so just demonstrating an ability to absorb the additional overhead I will regard as significant progress and encouraging.
I have bought a lot of shares during the recent retrenchment and would buy still more it the price retreated below about $26 again. But at $30 I'm looking at lightening up a bit --perhaps just selling some more calls.
Revenues were a little lower than expected, but Skip called the earnings pretty close. As expected, Aerostar was the weakest. I think films could have a decent year as I expect energy to be stronger than last year. Still, they say don't expect any earnings growth in Q1 at least.
I thought the results posted by Deere were pretty good today, but it looks like they were pretty much as expected. The stock has risen quite nicely in the last few months. Raven hasn't, so maybe we have room for improvement going into earnings. Added a few today.
Is it just me or has there been a lot of press releases recently with Raven? Are they telling us earnings are expected to be better in the future or just making us feel better about the weak earnings? Ha.
I would guess it is neither of those, Steve. Everyone was aware of Ron Moquist's aversion to blowing his own horn, and they boosted the PR function when he left. Maybe even overcompensated.
I just don't know whether Raven will begin to generate outsized growth again soon. I am fully invested and have been buying even more as the price has come down, so if returns begin to grow and justify a near 20 PE again, I will be a big beneficiary. But it is also possible that we will go into many years of lackluster growth. My consolation is that I really believe Dan and co. have seen how Moquist made money and as a fallback, he will be able to just run the same old Raven more efficiently and cost effectively even if new initiatives toward patentable innovation don't pan out.
I think they are re-investing a lot of cash in the business and probably expecting a downturn in gov't spending...i.e, fewer aerostar purchases. But I think the oil patch and the agricultural sector may make up the difference. I'm optimistic about this company because of the different businesses they are in, but haven't pulled the trigger yet.