Technology Stocks

Acuity Brands, Inc. (NYSE:AYI) Registers Strong Results As Earnings Beat Estimates In Q1 FY2019

Acuity Brands, Inc. (NYSE:AYI) experienced tremendous top-line growth last year, and as a result, it reported robust figures. In a statement, the company announced the results for Q1 FY2019 where most of the consensus estimates ranked low. Further, the firm’s revenues grew 19.6% year-on-year.

Notably, the earnings reported indicated that the firm is keeping up its growth trend that historically beat the market. Further, the diluted earnings per share (EPS) for the quarter increased by 17% which is a record. Historically, the firm reports low EPS in first quarters.

Share price gains by 5% since the beginning of 2019

Interestingly, the firm experienced increased sales that were also record-setting. Notably, the sales clocked $933 million which is an increase of 11% compared to Q1 FY2018. Despite all the positives in the other sectors, operating profit declined almost $4 million in this quarter. Subsequently, this makes the adjusted operating profit lower by more than $1 million at $134.1 million.

Interestingly, the availability of more cash enabled the firm to repurchase some amount of shares. Notably, the firm repurchased over $25 million worth of stock during the quarter in question. As such, the share price of the company grew over 5% since the beginning of this year. However, this is still quite low compared to an overall 35% decline registered for the last 12 months of trade.

 Future growth of Acuity Brands might slow down

Further, the quarter saw Acuity Brands register robust numbers regarding earnings from operating activities. Notably, the company netted $132 million from the operating activities, and this grew their cash position to $215 million. In particular, the $25 million used to repurchase shares from the market came from this portion. Therefore, the firm was left with over $180 million in cash to execute growth strategies.

However, the outlook for the lighting industry is not quite appealing. Although there will be some growth, previous estimates show that the market will grow at a 4.7% CAGR rate. If the market were to follow this trend, then it is possible that Acuity Brands might see some decline in its future growth.

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