Apogee (APOG) Q4 Earnings & Revenues Miss Estimates, Down Y/Y
Apogee Enterprises, Inc. APOG has reported adjusted earnings per share of 85 cents in fourth-quarter fiscal 2019 (ended Mar 2, 2019), which declined 11.5% year over year. The reported figure also missed the Zacks Consensus Estimate of 91 cents.
Apogee generated revenues of $346 million, down 2% year over year. Also, the revenue figure missed the Zacks Consensus Estimate of $357 million.
Cost of sales in the reported quarter was up 13% year over year to $302 million. Gross profit slumped 48% year over year to $44 million. Gross margin came in at around 13% compared to 24% recorded in the year-ago quarter.
Selling, general and administrative (SG&A) expenses flared up 2% year over year to $59 million. Adjusted operating income declined 8.4% year over year to $31 million. Operating margin in the quarter was 9.0% compared with 9.6% in the prior year quarter.
Apogee Enterprises, Inc. Price, Consensus and EPS Surprise
In the fiscal fourth quarter, the Architectural Framing Systems segment’s revenues went down 7% year over year to $170.6 million. The segment’s adjusted operating income plummeted 37% year over year to $9 million.
The Architectural Glass Systems segment’s revenues were up 13% year over year to $103.7 million. The segment’s adjusted operating income was up 3.3% year over year to $7.3 million.
Revenues in the Architectural Services segment was down 2% year over year to $66.3 million. The segment reported an operating profit of $9 million, reflecting a 44% year-over-year jump backed by the completion of large number of projects and lower costs.
The Large-Scale Optical Technologies segment’s revenues climbed 2% year over year to $24 million. Operating income in the reported quarter was up 3% year over year to $7.2 million.
The Architectural Framing Systems segment’s backlog increased slightly to $408.5 million in the reported quarter compared with $407.9 million a year ago. The Architectural Services’ segment backlog came in at $444 million — an improvement from $426.3 million in the prior-year quarter.
Apogee had cash and cash equivalents of $29.2 million at the end of the fiscal fourth quarter compared with $19.3 million as of the end of the prior-year quarter. The company generated cash flow from operations of $96.4 million in fiscal 2019 compared with $127 million reported in fiscal 2018. Long-term debt was $245 million as of Mar 2, 2019, compared with $216 million as of Mar 3, 2018.
During the quarter under review, the company repurchased 657,983 shares for $20 million. In fiscal 2019, Apogee returned $61.2 million of cash to shareholders through share repurchases and dividend payments — a 22% increase from fiscal 2018.
Apogee’s adjusted earnings came in at $2.96 per share in fiscal 2019, which missed the Zacks Consensus Estimate of $3.07. Earnings declined 8% year-over-year. Including special items, earnings came in at $1.63 per share for the fiscal, down from the prior fiscal’s $2.76.
Revenues for the fiscal increased 5.8% year over year to $1.40 billion from $1.33 billion in fiscal 2018. The topline figure, however, lagged the Zacks Consensus Estimate of $1.41 billion.
Fiscal 2020 Guidance
For fiscal 2020, Apogee expects revenue growth to be between 1% and 3%, with growth in three of the company’s segments, partly offset by a decline in Architectural Services due to execution schedules for backlog projects.
Apogee anticipates operating margin of 8.2-8.6%, with margin improvement in Architectural Glass and Architectural Framing Systems. However, margins are expected to negatively impacted by start-up costs related to the strategic growth investment in Architectural Glass as well as increased corporate costs from higher legal expenses.
The company projects adjusted earnings per share of $3.00-$3.20 and capital expenditures in the band of $60-$65 million.
Share Price Performance
Shares of Apogee have lost around 8.9% over the past year compared the with the industry’s decline of 10.0%.
Zacks Rank and Stocks to Consider
Apogee currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the Industrial Products sector are DXP Enterprises, Inc. DXPE, Lawson Products, Inc. LAWS and Albany International Corp. AIN, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
DXP Enterprises has an expected earnings growth rate of 21.6% for 2019. The company’s shares have gained 20.4%, over the past year.
Lawson Products has an outstanding projected earnings growth rate of 102.5% for the current year. The stock has appreciated 23.4% in a year’s time.
Albany International has an estimated earnings growth rate of 44.7% for the ongoing year. The company’s shares have gained 14%, in the past year.
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