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Why Is Apogee (APOG) Up 5.3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Apogee Enterprises, Inc. (APOG - Free Report) . Shares have added about 5.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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.
Apogee Earnings & Revenues Beat Estimates in Q4
Apogee reported earnings per share of $0.80 in fourth-quarter fiscal 2017 (ended Mar 4, 2017), up 16% from $0.69 per share in the prior-year quarter. Further, earnings also surpassed the Zacks Consensus Estimate of $0.71.
The company reported total revenue of $314 million, which grew 20% year over year. Revenues beat the Zacks Consensus Estimate of $288 million.
Apogee delivered another quarter of strong top- and bottom-line growth. This performance can be attributed to its strategies to grow through new geographies, new products and new markets as well as its ongoing Lean initiatives, productivity, automation, project selection and pricing initiatives.
Cost of goods sold in the quarter went up 20% year over year to $232 million. Gross profit improved 19% year over year to $82 million. Gross margin remained flat at 26%. Selling, general and administrative (SG&A) expenses increased 31% year over year to $52.5 million. Operating income jumped 3% year over year to $29.7 million. Operating margin contracted 160 basis points to 9.4%.
Segment Performance
Revenues at the Architectural Glass segment increased 14% year over year to $112 million. Operating income in the quarter went up 14% to $13.8 million from $12.1 million in the prior-year quarter.
Revenues at the Architectural Services segment plunged 14% year over year to $66 million. The segment reported an operating profit of $4.2 million, down 26% from $5.6 million in the year-ago quarter.
The Architectural Framing Systems segment’s revenues surged 53% year over year to $122 million. The segment’s operating income was up 26% to $9.7 million from $7.7 million in the prior-year quarter.
The Large-Scale Optical Technologies segment’s revenues went up 22% year over year to $26.3 million. Operating income in the reported quarter was $6.8 million, which rose 42% from $4.8 million in the year-ago quarter.
Financial 2017 Performance
Apogee reported earnings per share of $2.97 in fiscal 2017, up 34% year over year. Earnings surpassed the Zacks Consensus Estimate of $2.88. Revenues increased 14% year over year to $11.1 billion, beating the Zacks Consensus Estimate of $1.089 billion.
Financial Position
At the end of fiscal 2017, Apogee had cash and short-term investments of $19.5 million compared with $60.4 million as of fiscal 2016 end. The company generated cash flow from operations of $121 million in fiscal 2017 compared with $129 million in the prior fiscal. The company also hiked cash dividend by 12%.
Segment backlog at the Architectural Glass segment was pegged at $66.4 million in the fourth quarter, down from $75.9 million in third-quarter fiscal 2017. In the Architectural Framing Systems segment, backlog was $245.4 million, compared with $164.4 million in third-quarter fiscal 2017. Architectural Services’ segment backlog was $255 million, a $60 million improvement from third-quarter fiscal 2017.
In the fourth quarter, Apogee acquired Sotawall Limited, a leading designer and fabricator of high-performance, unitized curtainwall systems for commercial construction projects in North America. The buyout will expand Apogee’s geographic presence in Canada and the U.S., while adding unique curtainwall products to its offerings. The acquisition of this $100 million revenue business will add to architectural framing systems segment and will also be accretive to Apogee’s earnings in fiscal 2018.
Outlook for Fiscal 2018
For fiscal 2018, Apogee projects earnings per share to lie between $3.35 and $3.55 while revenues are expected to grow 10%. The upbeat guidance came on the back of solid execution of strategies to improve operational performance, productivity and project selection. Gross margin is estimated to be approximately 28% and operating margin of approximately 12.5%.
The company anticipates delivering capital expenditures of approximately $50 to $60 million in fiscal 2017, as it is investing to enhance capabilities and productivity capacity.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There have been two downward revisions for the current quarter. In the past month, the consensus estimate has shifted downward by 6.5% due to these changes.
At this time, Apogee's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% 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.
Zacks' style scores indicate that the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Apogee (APOG) Up 5.3% Since the Last Earnings Report?
A month has gone by since the last earnings report for Apogee Enterprises, Inc. (APOG - Free Report) . Shares have added about 5.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it 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.
Apogee Earnings & Revenues Beat Estimates in Q4
Apogee reported earnings per share of $0.80 in fourth-quarter fiscal 2017 (ended Mar 4, 2017), up 16% from $0.69 per share in the prior-year quarter. Further, earnings also surpassed the Zacks Consensus Estimate of $0.71.
The company reported total revenue of $314 million, which grew 20% year over year. Revenues beat the Zacks Consensus Estimate of $288 million.
Apogee delivered another quarter of strong top- and bottom-line growth. This performance can be attributed to its strategies to grow through new geographies, new products and new markets as well as its ongoing Lean initiatives, productivity, automation, project selection and pricing initiatives.
Cost of goods sold in the quarter went up 20% year over year to $232 million. Gross profit improved 19% year over year to $82 million. Gross margin remained flat at 26%. Selling, general and administrative (SG&A) expenses increased 31% year over year to $52.5 million. Operating income jumped 3% year over year to $29.7 million. Operating margin contracted 160 basis points to 9.4%.
Segment Performance
Revenues at the Architectural Glass segment increased 14% year over year to $112 million. Operating income in the quarter went up 14% to $13.8 million from $12.1 million in the prior-year quarter.
Revenues at the Architectural Services segment plunged 14% year over year to $66 million. The segment reported an operating profit of $4.2 million, down 26% from $5.6 million in the year-ago quarter.
The Architectural Framing Systems segment’s revenues surged 53% year over year to $122 million. The segment’s operating income was up 26% to $9.7 million from $7.7 million in the prior-year quarter.
The Large-Scale Optical Technologies segment’s revenues went up 22% year over year to $26.3 million. Operating income in the reported quarter was $6.8 million, which rose 42% from $4.8 million in the year-ago quarter.
Financial 2017 Performance
Apogee reported earnings per share of $2.97 in fiscal 2017, up 34% year over year. Earnings surpassed the Zacks Consensus Estimate of $2.88. Revenues increased 14% year over year to $11.1 billion, beating the Zacks Consensus Estimate of $1.089 billion.
Financial Position
At the end of fiscal 2017, Apogee had cash and short-term investments of $19.5 million compared with $60.4 million as of fiscal 2016 end. The company generated cash flow from operations of $121 million in fiscal 2017 compared with $129 million in the prior fiscal. The company also hiked cash dividend by 12%.
Segment backlog at the Architectural Glass segment was pegged at $66.4 million in the fourth quarter, down from $75.9 million in third-quarter fiscal 2017. In the Architectural Framing Systems segment, backlog was $245.4 million, compared with $164.4 million in third-quarter fiscal 2017. Architectural Services’ segment backlog was $255 million, a $60 million improvement from third-quarter fiscal 2017.
In the fourth quarter, Apogee acquired Sotawall Limited, a leading designer and fabricator of high-performance, unitized curtainwall systems for commercial construction projects in North America. The buyout will expand Apogee’s geographic presence in Canada and the U.S., while adding unique curtainwall products to its offerings. The acquisition of this $100 million revenue business will add to architectural framing systems segment and will also be accretive to Apogee’s earnings in fiscal 2018.
Outlook for Fiscal 2018
For fiscal 2018, Apogee projects earnings per share to lie between $3.35 and $3.55 while revenues are expected to grow 10%. The upbeat guidance came on the back of solid execution of strategies to improve operational performance, productivity and project selection. Gross margin is estimated to be approximately 28% and operating margin of approximately 12.5%.
The company anticipates delivering capital expenditures of approximately $50 to $60 million in fiscal 2017, as it is investing to enhance capabilities and productivity capacity.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. There have been two downward revisions for the current quarter. In the past month, the consensus estimate has shifted downward by 6.5% due to these changes.
Apogee Enterprises, Inc. Price and Consensus
Apogee Enterprises, Inc. Price and Consensus | Apogee Enterprises, Inc. Quote
VGM Scores
At this time, Apogee's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% 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.
Zacks' style scores indicate that the stock is suitable for value and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.