Apogee Enterprises, Inc.
) went up 0.34% after the company announced that its second-quarter
fiscal 2015 (ended Aug 30) results will benefit from a tax credit
of approximately $6 million (20 cents per share). The benefit under
Section 48C of the Internal Revenue Code is related to the
successful startup and commercial production of coatings on
Apogee's new $30 million architectural glass coater earlier this
The tax credit was started in 2010 by the IRS in cooperation with
the Department of Energy as part of the American Reinvestment and
Recovery Act and as an incentive for energy-efficiency investments
throughout the United States. Apogee's new coater will produce
coating products with higher levels of energy efficiency for
Apogee invested in the new state-of-the-art coater with an aim to
reap dividends as it is expected provide a competitive edge to the
company when architectural markets improve. The coater will enable
Apogee's architectural glass business to cater to the needs of
advanced energy-efficient and aesthetic coatings for landmark
buildings around the world.
In the second quarter, Apogee is witnessing significantly strong
growth in its architectural market than previously expected. As
customer lead times are extending across the industry triggered by
a sustained growth trend for commercial construction, the company
is incurring higher costs in the quarter as it ramps up to meet
immediate customer demand. Apogee is also evaluating options to
enhance architectural glass capacity in the near term.
Given the current market strength, Apogee expects strong backlog
growth and is maintaining its full-year guidance. For fiscal 2015,
Apogee expects revenue growth in the range of 15% to 20% and
earnings in the range of $1.40 to $1.50 per share. Apogee now
expects a 20 cents per share tax credit impact.
The company is slated to release its second-quarter results after
the market closes on Sep 16. The Zacks Consensus Estimate for the
quarter is at 27 cents, reflecting a 28.6% year-over-year growth,
and for fiscal 2015 is at $1.45, a 52.6% annual growth.
Apogee will benefit from its strategy of international growth and
new product introductions. Apogee's strong backlog bodes well for
its future performance. Moreover, the company intends to add new
capacities and fund acquisitions. Focus on operational
improvements, expansion into new geographies and markets as well as
product launches will drive Apogee's revenue growth going forward.
Apogee Enterprises is a leader in technologies for the design and
development of value-added glass products, services and systems.
Apogee currently carries a Zacks Rank #3 (Hold).
Some better ranked stocks that are worth considering in this sector
include Blount International Inc. (
), DXP Enterprises, Inc. (
) and IDEX Corporation (
). While Blount International sports a Zacks Rank #1 (Strong Buy),
DXP Enterprises and IDEX Corporation carry a Zacks Rank #2
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