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Why Is Apogee (APOG) Up 3.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Apogee Enterprises, Inc. (APOG - Free Report) . Shares have added about 3.9% 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 of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Apogee Enterprises reported earnings per share of 60 cents in second-quarter fiscal 2018 (ended Sep 2, 2017), down 22% from 77 cents per share recorded in the prior-year quarter. Also, earnings missed the Zacks Consensus Estimate of 72 cents, by a wide margin of 16.7%.
The company reported total revenues of $344 million, up around 24% year over year, mainly driven by growth in Architectural Framing Systems revenues. However, revenues lagged the Zacks Consensus Estimate of $351 million.
Cost of goods sold in the quarter flared up 25% year over year to $256 million. Gross profit improved 19% year over year to $86 million. Gross margin contracted 100 basis points (bps) to 25%. Selling, general and administrative (SG&A) expenses escalated 47% year over year to $58 million. Operating income declined 16% year over year to $27.8 million. Operating margin dipped 380 bps to 8.1%.
Segment Performance
Revenues at the Architectural Glass segment went down 2% year over year to $97.4 million. Operating income in the quarter advanced 7% to $10.3 million from $9.6 million registered in the prior-year quarter.
Revenues at the Architectural Services segment plummeted 40% year over year to $46.8 million. The segment reported an operating profit of $0.8 million, significantly down from $6.2 million recorded in the year-ago quarter.
The Architectural Framing Systems segment revenues soared a whopping 105% year over year to $189 million. The segment’s operating income climbed 27% to $16.5 million from $13 million witnessed in the prior-year quarter.
The Large-Scale Optical Technologies segment’s revenues dropped 5% year over year to $20.3 million. Operating income in the reported quarter came in at $4.2 million, declining 16% from $5.1 million recorded in the comparable period last year.
Financial Position
As of Sep 2, 2017, Apogee had cash and cash equivalents of $29.5 million compared with $47 million recorded as of Aug 27, 2016. The company generated $40.8 million in cash from operating activities in the six-month period ending Sep 2, 2017, compared with $43.5 million in the year-earlier period. Long-term debt was $257.8 million as of Sep 2, 2017, compared with $65.4 million as of Mar 4, 2017.
On Jun 12, Apogee completed the acquisition of EFCO. It has been reported in the Architectural Framing Systems segment.
In the Architectural Framing Systems segment, backlog increased to $496 million in the fiscal second quarter, up from $255.9 million recorded in the fiscal first quarter, including $216 million from the acquisition of EFCO. This substantial backlog will likely support growth in the second half of fiscal 2018 and fiscal 2019 as well. The Architectural Services’ segment backlog came in at $323 million, a $30-million improvement from the fiscal first quarter.
Fiscal 2018 Outlook Affirmed
Apogee reaffirmed its fiscal 2018 outlook announced last month, when the company revised the fiscal 2018 guidance downward, underlining lower revenues and margins from the EFCO acquisition, as well as acquisition-related charges and amortization of short-lived intangibles associated with Sotawall.
Apogee maintained its revenue growth guidance of 24-26% for fiscal 2018 and adjusted operating margin is expected to lie between 11% and 11.5%. Adjusted earnings per share for the fiscal 2018 are projected to lie between $3.40 and $3.60, reflecting year-over-year growth of around 12%.
The adjusted earnings guidance excludes the after-tax impact of amortization of short-lived acquired intangibles associated with the acquired backlog of Sotawall and EFCO of $7 million or 24 cents per share and acquisition-related costs for Sotawall and EFCO of approximately $3 million, or 11 cents per share. The company projects capital expenditures of approximately $60 million in fiscal 2018.
Apogee is poised to gain from its consistent focus on executing strategies to grow revenues through new geographies, products and markets. The company is also putting in efforts to improve its margins through operational excellence, productivity, project selection and cost-management initiatives.
Looking ahead to fiscal 2019, Apogee anticipates double-digit revenue growth and triple-digit basis-point operating margin improvement, backed by strong bidding activity and order pipeline. This upbeat sentiment is also supported by internal market visibility and positive external metrics, including forecasts for mid-single digit commercial construction market growth in the United States this year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, Apogee's stock has a great Growth Score of A, though it is lagging a bit on the momentum front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.
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Why Is Apogee (APOG) Up 3.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for Apogee Enterprises, Inc. (APOG - Free Report) . Shares have added about 3.9% 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 of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Apogee Misses Q2 Earnings & Sales, Affirms FY18 View
Apogee Enterprises reported earnings per share of 60 cents in second-quarter fiscal 2018 (ended Sep 2, 2017), down 22% from 77 cents per share recorded in the prior-year quarter. Also, earnings missed the Zacks Consensus Estimate of 72 cents, by a wide margin of 16.7%.
The company reported total revenues of $344 million, up around 24% year over year, mainly driven by growth in Architectural Framing Systems revenues. However, revenues lagged the Zacks Consensus Estimate of $351 million.
Cost of goods sold in the quarter flared up 25% year over year to $256 million. Gross profit improved 19% year over year to $86 million. Gross margin contracted 100 basis points (bps) to 25%. Selling, general and administrative (SG&A) expenses escalated 47% year over year to $58 million. Operating income declined 16% year over year to $27.8 million. Operating margin dipped 380 bps to 8.1%.
Segment Performance
Revenues at the Architectural Glass segment went down 2% year over year to $97.4 million. Operating income in the quarter advanced 7% to $10.3 million from $9.6 million registered in the prior-year quarter.
Revenues at the Architectural Services segment plummeted 40% year over year to $46.8 million. The segment reported an operating profit of $0.8 million, significantly down from $6.2 million recorded in the year-ago quarter.
The Architectural Framing Systems segment revenues soared a whopping 105% year over year to $189 million. The segment’s operating income climbed 27% to $16.5 million from $13 million witnessed in the prior-year quarter.
The Large-Scale Optical Technologies segment’s revenues dropped 5% year over year to $20.3 million. Operating income in the reported quarter came in at $4.2 million, declining 16% from $5.1 million recorded in the comparable period last year.
Financial Position
As of Sep 2, 2017, Apogee had cash and cash equivalents of $29.5 million compared with $47 million recorded as of Aug 27, 2016. The company generated $40.8 million in cash from operating activities in the six-month period ending Sep 2, 2017, compared with $43.5 million in the year-earlier period. Long-term debt was $257.8 million as of Sep 2, 2017, compared with $65.4 million as of Mar 4, 2017.
On Jun 12, Apogee completed the acquisition of EFCO. It has been reported in the Architectural Framing Systems segment.
In the Architectural Framing Systems segment, backlog increased to $496 million in the fiscal second quarter, up from $255.9 million recorded in the fiscal first quarter, including $216 million from the acquisition of EFCO. This substantial backlog will likely support growth in the second half of fiscal 2018 and fiscal 2019 as well. The Architectural Services’ segment backlog came in at $323 million, a $30-million improvement from the fiscal first quarter.
Fiscal 2018 Outlook Affirmed
Apogee reaffirmed its fiscal 2018 outlook announced last month, when the company revised the fiscal 2018 guidance downward, underlining lower revenues and margins from the EFCO acquisition, as well as acquisition-related charges and amortization of short-lived intangibles associated with Sotawall.
Apogee maintained its revenue growth guidance of 24-26% for fiscal 2018 and adjusted operating margin is expected to lie between 11% and 11.5%. Adjusted earnings per share for the fiscal 2018 are projected to lie between $3.40 and $3.60, reflecting year-over-year growth of around 12%.
The adjusted earnings guidance excludes the after-tax impact of amortization of short-lived acquired intangibles associated with the acquired backlog of Sotawall and EFCO of $7 million or 24 cents per share and acquisition-related costs for Sotawall and EFCO of approximately $3 million, or 11 cents per share. The company projects capital expenditures of approximately $60 million in fiscal 2018.
Apogee is poised to gain from its consistent focus on executing strategies to grow revenues through new geographies, products and markets. The company is also putting in efforts to improve its margins through operational excellence, productivity, project selection and cost-management initiatives.
Looking ahead to fiscal 2019, Apogee anticipates double-digit revenue growth and triple-digit basis-point operating margin improvement, backed by strong bidding activity and order pipeline. This upbeat sentiment is also supported by internal market visibility and positive external metrics, including forecasts for mid-single digit commercial construction market growth in the United States this year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
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 bit on the momentum front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Based on our scores, the stock is more suitable for growth investors than those looking for value and momentum.
Outlook
The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.