Acuity Brands Q4 Profit Up 35%, Results Beat View

(RTTNews) - Lighting fixtures maker Acuity Brands, Inc. (AYI) on Tuesday reported a 35 percent increase in profit for the fourth quarter from last year, reflecting double-digit sales growth and lower charges. Both revenue and adjusted earnings per share for the quarter topped analysts' expectations. The company also said its outlook has not changed materially during the past quarter.

Atlanta, Georgia-based Acuity Brands' net income for the fourth quarter was $44.9 million or $1.03 per share, higher than $33.3 million or $0.78 per share in the prior-year quarter.

The latest quarter's results included a pre-tax special charge of $0.3 million associated with streamlining activities announced earlier. The prior year's results included a pre-tax special charge and related expenses for streamlining actions totaling $6.5 million, or $0.10 per share.

Excluding special items, adjusted net income for the latest quarter was $45.1 million or $1.03 per share, compared to $37.4 million or $0.88 per share in the year-ago quarter. On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.02 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 13 percent to $579.8 million from $514.30 million in the same period last year, and topped analysts' consensus estimate of $569.33 million.

Acuity Brands noted that net sales growth for the quarter was driven primarily by a more than 14 percent increase in sales volume, partially offset by the impact of an unfavorable change in product prices and the mix of products sold.

The company recorded sales growth across most product categories and in key sales channels reflecting market share gains and growth in both the non-residential and residential markets, particularly for renovation and retrofit applications. Additionally, robust demand for the company's LED luminaires continued in the quarter as sales of these products more than doubled compared with last year.

Gross margin for the quarter was flat with the year-ago period at 40.9 percent. However, operating profit margin expanded to 13.5 percent from 11.9 percent in the year-ago period.

For fiscal 2013, Acuity Brands' net income rose to $127.4 million or $2.95 per share from $116.3 million or $2.72 per share in the prior year. Adjusted net income for the year was $143.1 million or $3.31 per share, compared to $127.9 million or $3.00 per share last year.

Net sales for the year rose 8 percent to $2.09 billion from $1.93 billion in the prior year.

Analysts expected the company to earn $3.31 per share for the year on revenues of $2.08 billion.

Acuity Brands said it expects to incur production transfer expenses and other costs associated with additional streamlining actions totaling about $2 million during the next two fiscal quarters. The company estimates that the total annualized pre-tax savings associated with the streamlining activities initiated in 2013 to be about $15 million, of which approximately $2 million was realized in the latest quarter.

The company currently expects to be at the total annualized savings run rate from the streamlining activities by the end of calendar year 2013 following the completion of the transfer of production and closure of the facilities.

Looking ahead, Acuity Brands noted that third-party forecasts and leading indicators suggested that the growth rate for the North American lighting market, including renovation and retrofit activity, will continue to be in the mid-single digit range during the remainder of calendar 2013 and into 2014.

While the company expects to see some volatility in demand among certain sales channels and geographies, it also expects overall demand in end markets will continue to improve and be more consistent as well as broad-based.

In Tuesday's regular trading session, AYI is currently trading at $96.50, up $4.48 or 4.87 percent on a volume of 13,537 shares.