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Acuity Brands (AYI) Q1 Earnings Top Estimates, Sales Miss
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Acuity Brands, Inc. (AYI - Free Report) reported mixed first-quarter fiscal 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus mark in four consecutive quarters, while revenues missed the estimate after beating the same for the third straight quarter.
Nevertheless, earnings and revenues increased on a year-over-year basis. The upside was backed by product vitality and service in its lighting and space businesses.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "We expanded adjusted operating profit, substantially grew adjusted diluted earnings per share and generated strong cash flow from operations. We again created permanent shareholder value through share repurchases."
Shares of AYI gained 2.9% during the trading session on Jan 9, 2023.
Acuity Brands Inc Price, Consensus and EPS Surprise
AYI reported adjusted earnings of $3.29 per share, which topped the consensus estimate of $2.92 by 12.7%. The metric also increased 15.4% from the year-ago reported figure of $2.85 per share.
Net sales of $997.9 million missed the consensus mark of $1,003 million and increased 0.5% from the prior-year quarter’s levels.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales rose 7.2% year over year to $947.1 million. Net sales in the Independent Sales Network were up 5.8% year over year to $673.1 million. Direct Sales Network sales were 18.2% up from the prior-year period’s levels to $106.4 million.
Retail sales of $49.9 million grew 6.4% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel improved 32.7% from the prior year’s levels to $49.1 million. The Other channel generated sales of $68 million, down 6.7% from the prior-year period’s levels.
Adjusted operating profit in the segment increased 0.4% from the prior year’s levels. The adjusted operating margin was down 90 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $56.8 million, up 22.4% year over year. Adjusted operating profit was $12.1 million, up 98.4% from a year ago. Adjusted operating margin was up 820 bps year over year to 21.3% from a year ago.
Operating Highlights
Adjusted operating margin came in at 14%, down 40 bps year over year. Adjusted EBITDA rose 4.1% to $153 million from a year ago.
Financials
At the end of first-quarter fiscal 2023, Acuity Brands had cash and cash equivalents of $284.1 million compared with $223.2 million at the fiscal 2022-end. For the fiscal first quarter, cash provided by operating activities totaled $186.6 million, up from $83.7 million in the prior-year period.
During the quarter, the company repurchased 0.5 million shares of its stock for $78 million.
3 Better-Ranked Construction Stocks Hogging in the Limelight
Headquartered in Temple, GA, Janus International Group, Inc. (JBI - Free Report) , carrying a Zacks Rank #2 (Buy), manufactures and supplies turn-key self-storage and commercial and industrial building solutions.
Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share in self-storage doors and related design and installation services.
Janus’ earnings for 2023 are expected to rise 16.9%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to 75 cents per share and 88 cents per share from 69 cents per share and 80 cents per share, respectively, over the past 60 days.
Altair Engineering (ALTR - Free Report) — holding a Zacks Rank #2 — provides software and cloud solutions in simulation, high-performance computing, data analytics and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2023 is 21.5%.
Sterling Infrastructure, Inc. (STRL - Free Report) — carrying a Zacks Rank #2 — provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2023 is 8.7%. The Zacks Consensus Estimate for 2023 earnings has improved to $3.41 from $3.37 over the past 30 days.
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Acuity Brands (AYI) Q1 Earnings Top Estimates, Sales Miss
Acuity Brands, Inc. (AYI - Free Report) reported mixed first-quarter fiscal 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus mark in four consecutive quarters, while revenues missed the estimate after beating the same for the third straight quarter.
Nevertheless, earnings and revenues increased on a year-over-year basis. The upside was backed by product vitality and service in its lighting and space businesses.
Pertaining to the quarterly release, Neil Ashe — chairman, president, and chief executive officer of Acuity Brands — said, "We expanded adjusted operating profit, substantially grew adjusted diluted earnings per share and generated strong cash flow from operations. We again created permanent shareholder value through share repurchases."
Shares of AYI gained 2.9% during the trading session on Jan 9, 2023.
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 $3.29 per share, which topped the consensus estimate of $2.92 by 12.7%. The metric also increased 15.4% from the year-ago reported figure of $2.85 per share.
Net sales of $997.9 million missed the consensus mark of $1,003 million and increased 0.5% from the prior-year quarter’s levels.
Segment Details
Acuity Brands Lighting and Lighting Controls or ABL’s net sales rose 7.2% year over year to $947.1 million. Net sales in the Independent Sales Network were up 5.8% year over year to $673.1 million. Direct Sales Network sales were 18.2% up from the prior-year period’s levels to $106.4 million.
Retail sales of $49.9 million grew 6.4% from the prior-year quarter’s levels. Sales in the Corporate Accounts channel improved 32.7% from the prior year’s levels to $49.1 million. The Other channel generated sales of $68 million, down 6.7% from the prior-year period’s levels.
Adjusted operating profit in the segment increased 0.4% from the prior year’s levels. The adjusted operating margin was down 90 basis points (bps) year over year.
Intelligent Spaces Group or ISG generated net sales of $56.8 million, up 22.4% year over year. Adjusted operating profit was $12.1 million, up 98.4% from a year ago. Adjusted operating margin was up 820 bps year over year to 21.3% from a year ago.
Operating Highlights
Adjusted operating margin came in at 14%, down 40 bps year over year. Adjusted EBITDA rose 4.1% to $153 million from a year ago.
Financials
At the end of first-quarter fiscal 2023, Acuity Brands had cash and cash equivalents of $284.1 million compared with $223.2 million at the fiscal 2022-end. For the fiscal first quarter, cash provided by operating activities totaled $186.6 million, up from $83.7 million in the prior-year period.
During the quarter, the company repurchased 0.5 million shares of its stock for $78 million.
Zacks Rank & Key Picks
Acuity Brands currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 Better-Ranked Construction Stocks Hogging in the Limelight
Headquartered in Temple, GA, Janus International Group, Inc. (JBI - Free Report) , carrying a Zacks Rank #2 (Buy), manufactures and supplies turn-key self-storage and commercial and industrial building solutions.
Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share in self-storage doors and related design and installation services.
Janus’ earnings for 2023 are expected to rise 16.9%. The Zacks Consensus Estimate for current-year and next-year earnings has improved to 75 cents per share and 88 cents per share from 69 cents per share and 80 cents per share, respectively, over the past 60 days.
Altair Engineering (ALTR - Free Report) — holding a Zacks Rank #2 — provides software and cloud solutions in simulation, high-performance computing, data analytics and artificial intelligence worldwide.
ALTR’s expected earnings growth rate for 2023 is 21.5%.
Sterling Infrastructure, Inc. (STRL - Free Report) — carrying a Zacks Rank #2 — provides transportation, e-infrastructure and building solutions.
STRL’s expected earnings growth rate for 2023 is 8.7%. The Zacks Consensus Estimate for 2023 earnings has improved to $3.41 from $3.37 over the past 30 days.