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Factors Setting the Tone for Apogee's (APOG) Q3 Earnings

Zacks Equity Research

Apogee Enterprises, Inc. APOG is slated to release third-quarter fiscal 2020 results on Dec 19, before the opening bell.

Which Way are the Estimates Headed?

The Zacks Consensus Estimates for Apogee’s earnings per share is pegged at 76 cents for the fiscal third quarter — suggesting a fall of 5% from the year-ago quarter’s reported tally. The Zacks Consensus Estimate for revenues is pinned at $357 million, reflecting a decline from the year-ago quarter’s $358 million.

A Sneak Peek at Q2

In the last reported quarter, Apogee’s adjusted earnings per share of 72 cents beat the Zacks Consensus Estimate of 57 cents. Revenues of $357 million came in line with the Consensus mark. However, both top and bottom lines declined year on year.

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

Factors at Play

Apogee is likely to have benefited from solid bidding and order activities, robust backlog in the Architectural Services segment and an encouraging outlook for the North American commercial construction market in the fiscal third quarter. The company’s continued focus on strategy to grow and diversify the business, explore growth opportunities and improvement in productivity and operational efficiency is expected to have boosted the company’s profitability in the quarter under review.

Regarding acquisitions, Apogee is primarily focused on the integration of EFCO to identify margin opportunities. The company is marching ahead with synergy goals by leveraging supplier relationships and driving on-time delivery. In the fiscal second quarter, the company completed a significant facility investment in the EFCO business. This investment is expected to have benefited EFCO’s productivity, quality and margins during the period under consideration.

Nevertheless, the company’s margins might have been negatively impacted by start-up costs related to the strategic growth initiative in Architectural Glass in the quarter. Also, a stronger U.S dollar is likely to have thwarted the segment’s top line. Lower volumes and lesser-favorable project maturity compared with the fiscal 2019 levels are likely to have thwarted the Architectural Services segment margins in the soon-to-be-reported quarter. Moreover, additional costs associated with the implementation of supply-chain projects might have dampened the Architectural Framing Systems segment’s margins.

Apogee Enterprises, Inc. Price and EPS Surprise

Apogee Enterprises, Inc. Price and EPS Surprise

Apogee Enterprises, Inc. price-eps-surprise | Apogee Enterprises, Inc. Quote

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Apogee this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Apogee is 0.00%. This is because currently the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 76 cents.
 
Zacks Rank: Apogee currently carries a Zacks Rank of 3.

Stocks Worth a Look

Here are few Industrial Products stocks which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

AGCO Corporation AGCO has an Earnings ESP of +2.85% and carries a Zacks Rank #3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pentair plc PNR has an Earnings ESP of +0.28% and holds a Zacks Rank of 3, at present.

Colfax Corporation CFX, currently a Zacks #3 Ranked stock, has an Earnings ESP of +15.01%.

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Apogee Enterprises, Inc. (APOG) : Free Stock Analysis Report
 
AGCO Corporation (AGCO) : Free Stock Analysis Report
 
Colfax Corporation (CFX) : Free Stock Analysis Report
 
Pentair plc (PNR) : Free Stock Analysis Report
 
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