Back to top

Image: Bigstock

Acuity Brands (AYI) to Post Q3 Earnings: What's in Store?

Read MoreHide Full Article

Acuity Brands, Inc. (AYI - Free Report) is slated to announce third-quarter fiscal 2020 results on Jun 30, before the opening bell.

In the last reported quarter, its adjusted earnings missed the Zacks Consensus Estimate by 2.1% but revenues beat the same by 3.4%. The top and bottom lines declined 3.5% and 7.5%, respectively, from the prior-year quarter. The downside was caused by a 7% decline in volumes, higher acquisition-related costs, increased professional fees and high variable incentive compensations.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been downwardly revised to $1.29 over the past seven days. The estimated figure indicates a decrease of 49% from $2.53 per share reported in the year-ago quarter. The consensus mark for revenues is pegged at $783.13 million, suggesting a 17.4% decrease from the year-ago reported figure of $947.6 million.

Acuity Brands Inc Price and EPS Surprise

Acuity Brands Inc Price and EPS Surprise

Acuity Brands Inc price-eps-surprise | Acuity Brands Inc Quote

Factors to Note

Acuity Brands’ fiscal third-quarter earnings are likely to have registered a year-over-year decline due to general economic slowdown, soft lighting industry, as well as extensive research and development expenses. Despite undertaking certain cost-saving actions, innovative lighting control solutions and energy-efficient luminaries, the overall industry has been grappling with weak demand for luminaries in the United States.

Although the company witnessed a positive impact of price/mix changes and acquisitions, retail sales are anticipated to have declined in the fiscal third quarter owing to change in the home center strategy and corporate accounts as a result of the timing of relight projects at several large retailers.  

Also, the company and its various channel partners have been dealing with multiple price increases due to rising costs and tariffs. U.S.-China trade tensions and tariff-related woes are likely to reflect on the company’s overall results for the to-be-reported quarter.

Nonetheless, its strategic alliance agreement with Ushio America, Inc. to bring the powerful germicidal technology — Care222 UV disinfection module — to North American customers is commendable. The Care222 lamp module inactivates viruses and bacteria, as well as protects public areas.

What Our Model Indicates

Acuity Brands does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, the company has a Zacks Rank #3 and an Earnings ESP of -3.73%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Weyerhaeuser Company (WY - Free Report) has an Earnings ESP of +500.00% and a Zacks Rank #3.

PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +372.73% and sports a Zacks Rank #1.

Foundation Building Materials, Inc. (FBM - Free Report) has an Earnings ESP of +213.95% and a Zacks Rank #3.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Published in