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Acuity Brands, Inc. (AYI - Free Report) reported impressive second-quarter fiscal 2022 results, wherein both the top and bottom lines handily beat the Zacks Consensus Estimate as well as improved from the prior year. Despite global supply chain challenges and unpredictable market conditions, higher sales from both of its segments along with price increases and product and productivity improvement drove the results.
Impressively, the stock gained more than 2.7% in the pre-market trading session on Apr 5.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "Our focus on service and product vitality has allowed us to meet current customer demand while also investing in the long-term growth and transformation of our Company."
Acuity Brands Inc Price, Consensus and EPS Surprise
AYI reported adjusted earnings of $2.57 per share, which topped the consensus estimate of $2.31 by 11.3%. The said metric also improved 21.2% from the year-ago reported figure of $2.12 per share.
Net sales of $909.1 million surpassed the consensus mark of $898 million by 1.3% and increased 17.1% from the prior-year quarter.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 17.1% year over year to $863.1 million. Net sales in the Independent Sales Network and Direct Sales Network were up 11.7% and 5.1% year over year, respectively. Sales in the Corporate Accounts channel increased 104.6% from the prior year. Yet, Retail sales declined 2.3% from the prior-year quarter.
Adjusted operating profit in the segment increased 13.4% from the prior year. Adjusted operating margin was down 50 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $50 million, marking a 15.5% year-over-year increase.
Adjusted operating profit was up a notable 16.7% from second-quarter fiscal 2021. Adjusted operating margin was up 10 bps year over year.
Operating Highlights
Gross margin declined 170 bps on a year-over-year basis to 41.7%, owing to higher material, labor and freight costs. This was partly offset by higher revenues, productivity improvements and benefits from the recent price increases.
Adjusted operating margin came in at 13.5%, down 50 bps year over year. The downside was due to a lower gross margin.
Financials
At fiscal second quarter-end, Acuity Brands had cash and cash equivalents of $475.5 million compared with $491.3 million at fiscal 2021-end. For the first six months of fiscal 2022, cash provided by operating activities totaled $127.3 million, reflecting a decrease from $212.6 million in the prior-year period.
During the first six months of fiscal 2022, the company repurchased 0.6 million shares of its common stock for $109.1 million.
Other Top-Ranked Stocks From the Broader Construction Sector
Fluor Corporation (FLR - Free Report) — a Zacks Rank #2 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing the markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It has made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.
FLR’s earnings estimates have increased to $1.34 per share from $1.12 over the past 60 days. The projected figure indicates 42.6% year-over-year growth.
AECOM (ACM - Free Report) — a Zacks Rank #2 company — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
Over the past 60 days, AECOM’s earnings estimates for fiscal 2022 have increased to $3.40 from $3.30. The projected figure indicates a 20.6% year-over-year rise.
D.R. Horton, Inc. (DHI - Free Report) — a Zacks Rank #2 company — is a Texas-based prime homebuilder. The company continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
The consensus mark for DHI’s earnings for fiscal 2022 has increased to $15.88 from $15.80 per share over the past 30 days. The projected figure indicates a 39.2% year-over-year rise.
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Acuity Brands (AYI) Stock Rises on Q2 Earnings & Sales Beat
Acuity Brands, Inc. (AYI - Free Report) reported impressive second-quarter fiscal 2022 results, wherein both the top and bottom lines handily beat the Zacks Consensus Estimate as well as improved from the prior year. Despite global supply chain challenges and unpredictable market conditions, higher sales from both of its segments along with price increases and product and productivity improvement drove the results.
Impressively, the stock gained more than 2.7% in the pre-market trading session on Apr 5.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "Our focus on service and product vitality has allowed us to meet current customer demand while also investing in the long-term growth and transformation of our Company."
Acuity Brands Inc Price, Consensus and EPS Surprise
Acuity Brands Inc price-consensus-eps-surprise-chart | Acuity Brands Inc Quote
Delving Deeper
AYI reported adjusted earnings of $2.57 per share, which topped the consensus estimate of $2.31 by 11.3%. The said metric also improved 21.2% from the year-ago reported figure of $2.12 per share.
Net sales of $909.1 million surpassed the consensus mark of $898 million by 1.3% and increased 17.1% from the prior-year quarter.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales grew 17.1% year over year to $863.1 million. Net sales in the Independent Sales Network and Direct Sales Network were up 11.7% and 5.1% year over year, respectively. Sales in the Corporate Accounts channel increased 104.6% from the prior year. Yet, Retail sales declined 2.3% from the prior-year quarter.
Adjusted operating profit in the segment increased 13.4% from the prior year. Adjusted operating margin was down 50 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $50 million, marking a 15.5% year-over-year increase.
Adjusted operating profit was up a notable 16.7% from second-quarter fiscal 2021. Adjusted operating margin was up 10 bps year over year.
Operating Highlights
Gross margin declined 170 bps on a year-over-year basis to 41.7%, owing to higher material, labor and freight costs. This was partly offset by higher revenues, productivity improvements and benefits from the recent price increases.
Adjusted operating margin came in at 13.5%, down 50 bps year over year. The downside was due to a lower gross margin.
Financials
At fiscal second quarter-end, Acuity Brands had cash and cash equivalents of $475.5 million compared with $491.3 million at fiscal 2021-end. For the first six months of fiscal 2022, cash provided by operating activities totaled $127.3 million, reflecting a decrease from $212.6 million in the prior-year period.
During the first six months of fiscal 2022, the company repurchased 0.6 million shares of its common stock for $109.1 million.
Zacks Rank
Acuity Brands currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Top-Ranked Stocks From the Broader Construction Sector
Fluor Corporation (FLR - Free Report) — a Zacks Rank #2 company — is gaining from the "Building a Better Future" initiative, which is focused on enhancing the markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline, and high-performing business culture. It has made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.
FLR’s earnings estimates have increased to $1.34 per share from $1.12 over the past 60 days. The projected figure indicates 42.6% year-over-year growth.
AECOM (ACM - Free Report) — a Zacks Rank #2 company — is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets. ACM has been continuously focusing on delivering industry-leading margins and unlocking capital to promote growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.
Over the past 60 days, AECOM’s earnings estimates for fiscal 2022 have increased to $3.40 from $3.30. The projected figure indicates a 20.6% year-over-year rise.
D.R. Horton, Inc. (DHI - Free Report) — a Zacks Rank #2 company — is a Texas-based prime homebuilder. The company continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
The consensus mark for DHI’s earnings for fiscal 2022 has increased to $15.88 from $15.80 per share over the past 30 days. The projected figure indicates a 39.2% year-over-year rise.