Apogee (APOG) Beats Q1 Earnings Estimates, Hikes FY24 View
Apogee Enterprises, Inc. APOG reported earnings per share (EPS) of $1.05 in first-quarter fiscal 2024 (ended May 27, 2023), surpassing the Zacks Consensus Estimate of 97 cents. The bottom line increased 5% year over year.
Apogee generated revenues of $362 million in the quarter under review, up 1.4% year over year on solid growth in the Architectural Glass segment. The top line surpassed the Zacks Consensus Estimate of $358 million.
Apogee Enterprises, Inc. Price, Consensus and EPS Surprise
Apogee Enterprises, Inc. price-consensus-eps-surprise-chart | Apogee Enterprises, Inc. Quote
Operational Update
Cost of sales in the fiscal first quarter fell 0.8% year over year to $269 million. Gross profit increased 8.6% year over year to $93 million. The gross margin expanded to 25.7% in the quarter from the prior-year quarter's 24.1%.
Selling, general and administrative (SG&A) expenses increased 13% year over year to $59 million. The operating income rose 1.7% year over year to $33.8 million.
Segmental Performance
In the fiscal first quarter, revenues in the Architectural Framing Systems segment rose 0.5% year over year to $164 million, aided by pricing mix and offset by lower volume. The segment's operating profit was $20 million compared with the year-ago quarter's $24 million.
Revenues in the Architectural Glass segment increased 27.5% year over year to $97 million on improved pricing actions, higher volume and a favorable sales mix. The segment reported an operating income of $16 million, up 219.6% year over year.
Revenues in the Architectural Services segment fell 13.5% year over year to $89 million, owing to lower volumes from project executions. The segment reported an operating loss of $0.6 million against an operating profit of $3 million reported in the year-ago quarter.
Revenues in the Large-Scale Optical Technologies segment were down 10.8% year over year to $22 million, driven by lower volume. The segment reported an operating profit of $5.5 million in the fiscal first quarter compared with the prior-year quarter's $6.5 million.
Backlog
The Architectural Services segment's backlog came in at $709 million at the end of the fiscal first quarter compared with $727 million at the end of the prior quarter. Backlog in the Architectural Framing segment amounted to $221 million, up from $243 million at the end of fourth-quarter fiscal 2023.
Financial Position
Apogee had cash and cash equivalents of $25 million at the end of first-quarter fiscal 2024 compared with $15 million at the end of fiscal 2023. Cash provided by operating activities was $21.3 million in the fiscal first quarter against the prior-year quarter’s cash utilized of $30.5 million.
Long-term debt was $171 million at the end of the fiscal first quarter compared with $170 million at the fiscal 2023-end.
Apogee returned $10.4 million of cash to shareholders through dividend payments in the fiscal first quarter.
FY24 Guidance
Apogee expects fiscal 2024 adjusted EPS between $4.15 and $4.45, up from the previously disclosed $3.90-$4.25. The company anticipates flat to modestly declining revenues from that reported in fiscal 2023, owing primarily to a lower volume in Architectural Services. Management projects capital expenditure between $50 million and $60 million for fiscal 2024, and a long-term average tax rate of 24.5%.
Price Performance
Shares of Apogee have gained 14% in the past year compared with the industry's growth of 4.7%.
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Zacks Rank & Other Stocks to Consider
Apogee currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Hubbell Incorporated HUBB, The Manitowoc Company, Inc. MTW and W.W. Grainger, Inc. GWW. HUBB and MTW flaunt a Zacks Rank #1 (Strong Buy) at present, and GWW has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell has an average trailing four-quarter earnings surprise of 21%. The Zacks Consensus Estimate for HUBB’s fiscal 2023 earnings is pegged at $13.81 per share. The consensus estimate for 2023 earnings has moved north by 22.5% in the past 60 days. Its shares gained 70.3% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 61.1% in the last year.
The Zacks Consensus Estimate for Grainger’s 2023 earnings per share is pegged at $35.83, up 7.6% in the past 60 days. It has a trailing four-quarter average earnings surprise of 9.1%. GWW gained 59% in the last year.
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