Acuity Brands Q2 Results Miss View; Stock Plunges

(RTTNews) - Acuity Brands, Inc. (AYI) reported that its net income for the second quarter of fiscal 2017 was $67.3 million, an increase of $1.8 million, or 2.7 percent from prior-year period. Fiscal 2017 second quarter earnings per share of $1.53 increased $0.04, or 2.7 percent, compared with $1.49 for the year-ago period.

Both Adjusted earnings per share and net sales for the quarter missed analysts' expectations.

In the Tuesday's pre-market trade, AYI is trading at $180.85, down $23.21 or 11.37%.

Adjusted earnings per share for the second quarter of fiscal 2017 decreased 1.7 percent to $1.77 compared with $1.80 for the year-ago period. Analysts polled by Thomson Reuters expected the company to report earnings of $1.83 per share for the second-quarter. Analysts' estimates typically exclude special items.

Quarterly increased $26.9 million, or 3.5 percent, to $804.7 million from $777.8 million reported in the prior-year period. Analysts expected revenue of $828.1 million for the quarter. The 3.5 percent year-over-year growth in fiscal 2017 second quarter net sales was due primarily to a 4 percent increase in volume and approximately 1 percent from acquired revenues from acquisitions, partially offset by approximately 1 percent net unfavorable change in product prices and mix of products sold or "price/mix". The impact from changes in foreign currency exchange rates was less than one percentage point.

Sales volume was higher across most key product categories and sales channels in the U.S. and Canada, while volumes declined in both Europe and Mexico. The change in price/mix was due primarily to lower pricing on luminaires, largely as a result of lower LED component costs. Sales of LED-based products increased approximately 20 percent from the year-ago period and represented approximately two-thirds of fiscal 2017 second quarter total net sales.

Vernon J. Nagel, Chairman, President, and Chief Executive Officer of Acuity Brands, "Even though the growth rate of lighting solutions in the North American market in the first half of our fiscal 2017 was lower than anticipated, we continue to see significant long-term growth opportunities. Current quoting activity remains favorable and both short and long-term fundamental drivers of the markets we serve remain positive.....Based on various leading indicators and our focused investments in key strategic areas, we remain bullish regarding the Company's prospects for continued future profitable growth."

Further, third-party forecasts suggest that the softness in market demand that began in the third calendar quarter of 2016 and continued through our second quarter may persist through the remainder of fiscal 2017. These forecasts indicate that the North American lighting market should return to growth in fiscal 2018.

The company expects to continue to outperform the growth rates of the markets it serves by executing its strategies focused on growth opportunities for new construction and renovation projects, expansion into underpenetrated geographies and channels, and growth from the continued introduction of new lighting and building management solutions as part of our integrated, tiered solutions strategy.