Acuity Brands Q2 Profit Up 42%, Beats View, But Revenues Miss

(RTTNews) - Lighting fixtures maker Acuity Brands, Inc. (AYI) on Wednesday reported a 42 percent increase in profit for the second quarter from last year, reflecting improved margins and double-digit sales growth.

Adjusted earnings per share beat analysts' expectations, while revenues missed their estimates. Looking ahead, the company said it remains very bullish about its prospects for continued future profitable growth.

Atlanta, Georgia-based Acuity Brands' reported net income for the second quarter of $46.4 million or $1.07 per share, up from $32.7 million or $0.75 per share in the prior-year quarter.

The latest quarter's results include $0.02 per share of acquisition-related professional fees, partially offset by the benefit of a $0.01 per share favorable pre-tax adjustment to previously recorded special charges related to streamlining activities.

Excluding special items, adjusted net income for the quarter was $46.7 million or $1.08 per share, compared to $32.6 million or $0.75 per share in the year-ago quarter.

On average, thirteen analysts polled by Thomson Reuters expected the company to report earnings of $1.05 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 13 percent to $616.1 million from $546.2 million in the same period last year. Analysts were looking for revenue of $627.95 million for the quarter.

The company attributed the sales growth to a 15 percent increase in sales volume that was broad-based across most product categories and key sales channels.

This was partly offset by an estimated 1 percentage point net unfavorable change in product prices and mix of products sold and a 1 percent unfavorable impact from changes in foreign currency exchange rates.

Gross profit margin for the quarter rose 210 basis points over the year-ago period to 41.5 percent.

The company said sales of LED-based products increased about 60 percent from the year-ago period and represented about 43 percent of net sales.

Looking ahead, chairman, president and CEO Vernon Nagel said, "Third-party forecasts as well as key leading indicators suggest that the growth rate for the North American lighting market, which includes renovation and retrofit activity, will be in the mid-to-upper single digit range for our fiscal 2015 with expectations that overall demand in our end markets will continue to experience solid growth over the next several years."

Acuity Brands said it believes the lighting and lighting-related industry will experience solid growth over the next decade, particularly as energy and environmental concerns come to the forefront along with emerging opportunities for digital lighting to play a key role in the Internet of Things.

The company expects to incur production transfer expenses and additional costs associated with streamlining actions of about $1.4 million during the second half of fiscal 2015, but also expects to achieve annual savings in fiscal 2015 in excess of these costs.

AYI is trading at $169.54, up $1.38 or 0.82 percent on a volume of 48,914 shares.