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Earnings Preview: Apogee

by Zacks Equity Research

September 17, 2012 | Comments : 0 Recommended this article: (0)

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Apogee Enterprises, Inc. ( APOG - Analyst Report ) is slated to report its second-quarter fiscal 2013 results after the closing bell on September 19. Earnings according to the Zacks Consensus Estimate for the quarter are projected at 9 cents per share, representing an estimated year-over-year increase of 1,000%. Revenues as per the Zacks Consensus Estimate are expected to be $170 million.

First Quarter Synopsis

The company reported earnings of 6 cents per share in first-quarter fiscal 2013, in stark contrast to the prior-year loss of 8 cents per share. The results beat the Zacks Consensus Estimate of 3 cents per share.

Total revenue increased 1% year over year to $154.1 million in the reported quarter, missing the Zacks Consensus Estimate of $164 million. The modest improvement in top-line was mainly attributable to growth in the Large-Scale Optical Technologies segment.

Estimate Revision Trend

Agreement

The estimate for the second quarter reflects absolute lack of activity with no movement in either direction over the last 7 and 30 days. A similar trend is seen for fiscal 2013.

Magnitude

The Zacks Consensus Estimates remained unchanged for both the second quarter and fiscal 2013 over the last 7 and 30 days

Earnings Surprise History

With respect to earnings surprises, Apogee has topped the Zacks Consensus Estimate in all the last four quarters. The company has delivered an average positive earnings surprise of 76.41% over the preceding four quarters, implying that it has beaten the Zacks Consensus Estimate by that measure.

Our Take

Apogee is currently experiencing robust growth in the picture framing glass and acrylic business. Improved architectural glass pricing and higher margins will benefit earnings moving ahead.

However, weak global economic growth and uncertainty in the global economic scenario can limit Apogee’s near-term revenue visibility. Further, any deterioration in the commercial construction market in North America may lead to either delay or cancellation of projects, causing headwinds for the company.

Apogee retains a short-term Zacks #3 Rank (Hold). We have a long-term Outperform recommendation on the stock.

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