Shares of lighting company Acuity Brands, Inc. (NYSE: AYI) jumped as much as 13.5% in early trading Thursday after the company reported fiscal third-quarter earnings. At 12:10 p.m. EDT shares had slipped slightly, but were still up 7.8% on the day.
Revenue rose 5% in the quarter ended May 31 to $891.6 million, and net income jumped 11% to $82.2 million, which led to earnings of $2.15 per share after adjusting for one-time items. Analysts were only expecting $881.4 million in revenue and earnings per share of $1.98.
Despite the positive results , management said that supply-chain costs were higher than anticipated and demand was weak in the short-cycle, small-lighting-project market. This could present even more upside in the future if cost reductions are realized.
The building market is adopting LED lighting at an increasing rate, and new devices connected to the Internet of Things could boost growth in the future. For now, the fact that Acuity is beating expectations is enough to push shares higher. But with shares trading at 21 times next year's earnings estimates, the market is setting a high bar for the company's future results .
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