Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On May 3, we maintained our Neutral recommendation on leading designer and developer of glass products, services, and systems, Apogee Enterprises Inc (APOG - Analyst Report), based on strong backlog in its architectural segment, revenue growth opportunities from focus on operational improvements, expansion and new product launches, recovery in U.S. construction; partially offset by concerns regarding moderating global economic growth.
 
Why Reiterated?
 
Apogee’s fourth-quarter fiscal 2013 earnings of 15 cents per share were up 36% from the year-ago quarter. Total revenue improved 6% to $180 million. However, both fell short of the respective Zacks Consensus Estimates.
 
For fiscal 2014, Apogee expects earnings to lie in the range of 90 cents to $1.00 per share on the back of high single-digit revenue growth. Gross margin is anticipated to be at least 22% in fiscal 2014. Geographic growth in the domestic markets, introduction of new strong architectural glass pricing and mix and improving installation margins are expected to contribute to revenue growth. Furthermore, Apogee’s productivity initiatives are expected to generate 50 to 100 basis points of margin improvement.
 
Overall, in fiscal 2013, architectural segment revenues grew 6%, led by the installation, storefront and window businesses, and operating income improved by more than $20 million, on the back of improved architectural glass pricing and product mix, good operational performance across the segment. Backlog in the architectural segment at the end of the fourth quarter of fiscal 2013 was $297 million compared with $237 million in the year-ago quarter. Apogee expects to deliver 86% of the backlog (nearly $255 million) in fiscal 2014 and the remaining 14% (nearly $42 million) in fiscal 2015.
 
Apogee has faced challenging commercial construction market conditions so far. However, the U.S. construction is finally stabilizing and is on the road to a much-awaited recovery. The American Institute of Architects projects a 5% increase in spending in calendar 2013 for non-residential construction project and 7.2% for 2014. This bodes well for Apogee’s going ahead.
 
However, macroeconomic conditions poses a headwind for Apogee’s performance in fiscal 2014. Moderating global economic growth and uncertainty in the global economic scenario can limit Apogee’s near-term revenue visibility
 
Other Stocks to Consider
 
Apogee retains a short-term Zacks Rank #4 (Sell). Other stocks in the same industrial products sector with favorable Zacks ranks are Valmont Industries, Inc. (VMI - Analyst Report) and Mueller Water Products, Inc. (MWA - Snapshot Report) with a Zacks Rank #1 (Strong Buy) while Worthington Industries, Inc. (WOR - Snapshot Report) carries a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%