SIOUX FALLS, SD -
Earnings were down, but after a conference call with investors, Raven Industries stock actually rose on Wall Street.
The Sioux Falls company reported a nearly 28 percent drop in income for its second quarter, with a big chunk of that blamed on federal government budget cuts.
Raven Industries is made up of three divisions. Applied Technology provides GPS systems and high-tech tools for the agricultural industry. Engineered Films makes plastic films and sheetings that are used in everything from construction to landfills.
But perhaps it is best known for Aerostar, which makes aerospace products used in surveillances research and communication. That's also the division that depends on government contracts. It's where the company saw its biggest losses with sales down 23 percent.
"Any degree of uncertainty in federal policy and federal spending doesn't help private business. But certainly with our Aerostar division, much of what we've seen was anticipated in light of the transition and draw down of U.S. Forces and coalition forces in Afghanistan," Stephanie Herseth Sandlin with Raven Industries said.
Herseth Sandlin says the company is exploring other uses for its Aerostar products, from border security to monitoring drug trafficking in the Caribbean. Raven is hoping that partnerships like the one it has now with Google will send sales soaring again. This summer it sent up balloons over New Zealand as part of an experiment to provide wireless Internet access to remote areas.
"Partnerships like that with Google and Project Loon, but also with Raytheon for our advanced radar systems are great opportunities for the Aerostar division as long as with the big partners we work with across the other divisions as well," Herseth Sandlin said.
Investors didn't seem scared off by Monday's less than ideal second quarter report from Raven. In fact, the company's stock was up slightly at the end of the trading day.
"We're in transition and I think our investors realize that and we're pleased with the confidence we're seeing in the market today," Herseth Sandlin said.
Raven Industries has also announced it will open a center at South Dakota State University's Research Park focusing on precision agriculture. It'll give students hands on experience using new technology in farming.
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