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Apogee (APOG) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research

Apogee Enterprises, Inc. APOG is slated to release fourth-quarter fiscal 2019 results on Apr 11, before the opening bell.

Apogee reported earnings per share of 80 cents in third-quarter fiscal 2019 (ended Dec 1, 2018) which declined 11% year over year, missing the Zacks Consensus Estimate of 83 cents. The company reported total revenues of around $358 million which inched up 0.3% year over year. The revenue figure, however, missed the Zacks Consensus Estimate of $369 million.

Apogee surpassed the Zacks Consensus Estimate in two of the trailing four quarters, average positive surprise being 5.86%. Can the company surprise investors again or is it heading for a possible pullback?

Let’s see how things are shaping up for this announcement.

Apogee Enterprises, Inc. Price and EPS Surprise

Apogee Enterprises, Inc. Price and EPS Surprise | Apogee Enterprises, Inc. Quote

 

Earnings Whispers

Our proven model shows that Apogee is likely to beat estimates in fourth-quarter fiscal 2019. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here as you will see below:

Earnings ESP: Earnings ESP for Apogee is +1.41%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are currently pegged at 96 cents and 95 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Apogee currently carries a Zacks Rank #3, which when combined with a positive ESP, makes us reasonably confident of an earnings beat.

It should be noted that we caution against stocks with a Zack Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors at Play

Apogee expects that each of its segments has opportunities to increase market share, expand into new geographies and markets, and roll out products. These growth opportunities are supported by the solid bidding and order activity, a robust and increasing backlog, and continued favorable outlook for the North American commercial construction market. Apogee anticipates that the Architectural Glass segment will benefit from strong order flow which will support top-line growth for the fiscal fourth quarter and over the next several quarters as well. Moreover, the company expects its Large-Scale Optical (LSO) segment to record top-line growth in the to-be-reported quarter.

However, Apogee witnessed lower revenues and profits in Architectural Framing Systems in third-quarter fiscal 2019, reflecting reduced volumes due to project timing delays. The company believes this near-term impact will carry over into the soon-to-be-reported quarter.

Regarding acquisitions, Apogee is primarily focusing on the integration of EFCO to recognize margin opportunities. In the fiscal fourth quarter, the company continued to make investments, in a bid to improve operations at EFCO, along with other strategic projects to enable growth.

The Zacks Consensus Estimates for Apogee’s earnings per share is pegged at 91 cents for the fiscal fourth quarter — reflecting a 9.6% increase year over year. The Zacks Consensus Estimate for revenues for the Mar-end quarter is pegged at $357 million, representing a year-over-year improvement of 1.1%.

Meanwhile, Apogee had earlier reduced its outlook for fiscal 2019. The company expects revenue growth to be between 6% and 7% for the fiscal compared to the prior guidance of 8-10%, with lower projected revenues in the Architectural Glass and Architectural Framing Systems segments. Apogee projects earnings per share for the fiscal at $3.13 compared to the earlier guidance of $3.13-$3.33. The company also revised its operating margin guidance to 8.4% from the previous 8.3-8.8%.
 
Apogee’s shares have lost around 8.1% over the past year compared to the industry’s decline of 8.5%.


   
Stocks to Consider

Here are a few other companies that you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:

Bloomin' Brands, Inc. BLMN has an Earnings ESP of +6.45% and holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ally Financial Inc. ALLY has an Earnings ESP of +32.60% and carries a Zacks Rank #3.
 
Valmont Industries, Inc. VMI, another Zacks #3 Ranked company, has an Earnings ESP of +11.60%.

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