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Why Is Acuity Brands (AYI) Up 2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acuity Brands due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Acuity Brands’ Q1 Earnings Surpass Estimates, Up Y/Y
Acuity Brands reported better-than-expected results in first-quarter fiscal 2019, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings of $2.32 per share surpassed the consensus estimate of $2.16 by 7.4%. Also, the reported figure increased 19.6% on a year-over-year basis, backed by solid top-line growth of the company. The positive results were mainly driven by higher demand for small and medium-sized lighting solutions, along with growth of its building management solutions.
Sales
Net sales during the first quarter came in at $932.6 million, beating the consensus mark of $931.7 million. Also, the reported figure increased 10.7% year over year. The upside stemmed from 11% increase in sales volume, as well as a 1% favorable impact from acquisitions (net of divestitures). However, these positives were partially offset by a 1% negative impact from the adoption of ASC 606 as well as changes in foreign exchange rates.
Operating Highlights
Adjusted gross profit margin declined 350 basis points (bps) to 39.5% on a year-over-year basis.
Adjusted selling, distribution and administrative or SD&A expenses — down 20 bps from the year-ago quarter — constituted 25.2% of net sales. Adjusted operating margin came in at 14.4%, down 170 bps year over year.
Financials
Cash and cash equivalents, as of Nov 30, 2018, were $214.8 million compared with $129.1 million at the end of fiscal 2018.
Net cash provided by operating activities was $131.8 million in the fiscal first quarter compared with $139.8 million a year ago.
Outlook
Despite reporting better-than-expected results in the first quarter of fiscal 2019, the company said that it is “cautiously optimistic for fiscal 2019”. Third-party forecasts and leading indicators suggest that the North American lighting market is projected to increase in low-single digits in fiscal 2019.
Acuity Brands remains optimistic about the potentiality of the lighting and lighting-related industry. Also, it remains confident of its previously announced growth strategies that continue to improve products and solutions mix, while leveraging the company’s fixed cost infrastructure in order to achieve its pre-determined target of achieving higher margins and overall profitability.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Acuity Brands has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Acuity Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Acuity Brands (AYI) Up 2% Since Last Earnings Report?
It has been about a month since the last earnings report for Acuity Brands (AYI - Free Report) . Shares have added about 2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acuity Brands due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Acuity Brands’ Q1 Earnings Surpass Estimates, Up Y/Y
Acuity Brands reported better-than-expected results in first-quarter fiscal 2019, with earnings and revenues surpassing the Zacks Consensus Estimate.
Adjusted earnings of $2.32 per share surpassed the consensus estimate of $2.16 by 7.4%. Also, the reported figure increased 19.6% on a year-over-year basis, backed by solid top-line growth of the company. The positive results were mainly driven by higher demand for small and medium-sized lighting solutions, along with growth of its building management solutions.
Sales
Net sales during the first quarter came in at $932.6 million, beating the consensus mark of $931.7 million. Also, the reported figure increased 10.7% year over year. The upside stemmed from 11% increase in sales volume, as well as a 1% favorable impact from acquisitions (net of divestitures). However, these positives were partially offset by a 1% negative impact from the adoption of ASC 606 as well as changes in foreign exchange rates.
Operating Highlights
Adjusted gross profit margin declined 350 basis points (bps) to 39.5% on a year-over-year basis.
Adjusted selling, distribution and administrative or SD&A expenses — down 20 bps from the year-ago quarter — constituted 25.2% of net sales. Adjusted operating margin came in at 14.4%, down 170 bps year over year.
Financials
Cash and cash equivalents, as of Nov 30, 2018, were $214.8 million compared with $129.1 million at the end of fiscal 2018.
Net cash provided by operating activities was $131.8 million in the fiscal first quarter compared with $139.8 million a year ago.
Outlook
Despite reporting better-than-expected results in the first quarter of fiscal 2019, the company said that it is “cautiously optimistic for fiscal 2019”. Third-party forecasts and leading indicators suggest that the North American lighting market is projected to increase in low-single digits in fiscal 2019.
Acuity Brands remains optimistic about the potentiality of the lighting and lighting-related industry. Also, it remains confident of its previously announced growth strategies that continue to improve products and solutions mix, while leveraging the company’s fixed cost infrastructure in order to achieve its pre-determined target of achieving higher margins and overall profitability.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Acuity Brands has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Acuity Brands has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.