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Category: Stock Market and Apogee Enterprises
Date: 18 September 2019 Stock Price: $45.92 We take a look at the 2nd quarter earnings release of their 2020 fiscal year of Apogee the glass and aluminum window manufacturer and installer.
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About Apogee Enterprises
Apogee is a leader in architectural products and services. Our glass and aluminum window, storefront and curtainwall systems make commercial buildings look great, reduce energy consumption, and protect occupants and property from hazards like hurricanes and blasts.
Overview of Apogee's latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $357.058 million (up from $362.133 million from the same quarter of the previous year)
- Revenues decreased by -1% over the last 12 months
- Cost of Sales: $270.850 million (up from $277.667 million for the same quarter of the previous year)
- Cost of revenues decreased by -2% over the last 12 months
- Net income: $19.279 million (down from $20.513 million loss for the same quarter of the previous year)
- Diluted earnings per share: $0.72 (unchanged from $0.72 for the same quarter of the previous year)
- Dividends declared for full year: $0.1750 (up from $0.1350 for the same quarter of the previous year)
- Dividend yield: 1.5% (assuming this quarter's dividend is paid each quarter of the fiscal year)
- Diluted weighted-average shares outstanding:26.736 million (down from 28.379 million for the same quarter of the previous year)
- Cash and cash equivalents: $19.445 million
- Cash and cash equivalents per share: $0.73
- Cash and cash equivalents makes up 1.58% of Apogee's market capital
- Cash and cash equivalents makes up 1.71% of Apogee's total assets
- Stockholders equity: $503.801 million
- Stockholders equity per Apogee stock:$18.84
- Apogee is trading at 2.43 times its stockholders equity per share
- Cash generated from operations (for the 6 months): $34.722
- Cash generated from operations per share (for the 6 months): $1.29
- Cash generated from operations per share (for the 6 months): $1.29
Apogee Enterprises' management commentary on the results and earnings guidance
MINNEAPOLIS--(BUSINESS WIRE)--Sep. 17, 2019-- Apogee Enterprises, Inc. (Nasdaq: APOG) today announced its fiscal 2020 second-quarter results. Second-quarter revenue was $357.1 million, compared to $362.1 million in the second quarter of fiscal year 2019. Earnings per diluted share were $0.72, equal to the prior year period. Adjusted earnings in last year’s second quarter were $0.74 per diluted share, which excluded the amortization of short-lived acquired intangibles and acquired project profits.
“We delivered solid operational and financial performance in the second quarter, with results largely in-line with our expectations,” said Joseph F. Puishys, Chief Executive Officer. “Our Architectural Glass segment made significant year-over-year improvements, with increased revenue and margins, and Architectural Services continued to build on its record backlog. We also made substantial progress toward completing the last remaining legacy EFCO project, tracking as expected to our schedule and cost estimates. We are delivering on our commitments and see positive momentum in our business.”
“Looking forward, we remain confident that our strategy to diversify revenue streams, broaden our growth opportunities, and improve the efficiency and productivity of our operations positions the company well for future earnings growth and more consistent operating performance,” continued Mr. Puishys. “During the quarter we progressed on a number of initiatives to advance this strategy. We completed a facility upgrade that we expect to significantly enhance productivity and margins in our EFCO business. We also began to implement plans to enhance profitability across the entire Framing Systems segment and took initial steps to increase supply chain integration, reduce procurement costs, and optimize our facility footprint. Finally, we made significant progress on a new operation that will be focused on the short lead-time segment of the architectural glass market, which continues our efforts to diversify our business mix and provide new opportunities for long-term growth.”
Outlook
The company reaffirmed its guidance for fiscal 2020. For the full-year the company continues to expect:
“We delivered solid operational and financial performance in the second quarter, with results largely in-line with our expectations,” said Joseph F. Puishys, Chief Executive Officer. “Our Architectural Glass segment made significant year-over-year improvements, with increased revenue and margins, and Architectural Services continued to build on its record backlog. We also made substantial progress toward completing the last remaining legacy EFCO project, tracking as expected to our schedule and cost estimates. We are delivering on our commitments and see positive momentum in our business.”
“Looking forward, we remain confident that our strategy to diversify revenue streams, broaden our growth opportunities, and improve the efficiency and productivity of our operations positions the company well for future earnings growth and more consistent operating performance,” continued Mr. Puishys. “During the quarter we progressed on a number of initiatives to advance this strategy. We completed a facility upgrade that we expect to significantly enhance productivity and margins in our EFCO business. We also began to implement plans to enhance profitability across the entire Framing Systems segment and took initial steps to increase supply chain integration, reduce procurement costs, and optimize our facility footprint. Finally, we made significant progress on a new operation that will be focused on the short lead-time segment of the architectural glass market, which continues our efforts to diversify our business mix and provide new opportunities for long-term growth.”
Outlook
The company reaffirmed its guidance for fiscal 2020. For the full-year the company continues to expect:
- Revenue growth of 1 to 3 percent, with growth in three of the company’s segments, partially offset by a decline in Architectural Services due to the execution schedules for projects in backlog.
- Operating margins between 8.2 to 8.6 percent, with margin improvement in Architectural Glass and Architectural Framing Systems, offset by reduced margins in Architectural Services due to reduced leverage on lower volumes and less favorable project maturity compared to fiscal 2019. Margins will also be negatively impacted by start-up costs related to the strategic growth investment in Architectural Glass, costs associated with supply chain initiatives, and increased corporate costs from higher legal and other advisory expenses.
- Diluted earnings per share in the range of $3.00 to $3.20, which excludes the possible benefit of any potential expense recovery associated with the EFCO-related charges the company recorded in the previous fiscal year.
- Tax rate of approximately 24.5 percent.
- Capital expenditures of $60 to $65 million.
Apogee Enterprises (NASDAQ:APOG) stock price history
The image below shows the stock price history of Apogee (NASDAQ: APOG) for the last 5 years. And its been an okay time for Apogee stockholders. 5 years ago the stock was trading at around $40 a share, and its currently trading at $45.92. Thats a modest stock price return of 14.8% over the last 5 years. While its not a bad return the opportunity cost of holding Apogee stock instead of some of the others we recently valued that showed stock price returns of well above 100% over a 5 year period is significant. APOG is trading at a lot closer to its 52 week high than it is to its 52 week low, which shows that short term sentiment and momentum of Apogee stock is positive.
Recent coverage Apogee Enterprises
The extract below discusses Apogee at more detail, as obtained from Zacks.
Apogee Enterprises (APOG - Free Report) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 26.32%. A quarter ago, it was expected that this glass products company would post earnings of $0.53 per share when it actually produced earnings of $0.58, delivering a surprise of 9.43%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times. Apogee Enterprises, which belongs to the Zacks Glass Products industry, posted revenues of $357.06 million for the quarter ended August 2019, in line with the Zacks Consensus Estimate. This compares to year-ago revenues of $362.13 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Apogee Enterprises shares have added about 38.2% since the beginning of the year versus the S&P 500's gain of 19.6%.
Read the full article here
Apogee Enterprises (APOG - Free Report) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 26.32%. A quarter ago, it was expected that this glass products company would post earnings of $0.53 per share when it actually produced earnings of $0.58, delivering a surprise of 9.43%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times. Apogee Enterprises, which belongs to the Zacks Glass Products industry, posted revenues of $357.06 million for the quarter ended August 2019, in line with the Zacks Consensus Estimate. This compares to year-ago revenues of $362.13 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Apogee Enterprises shares have added about 38.2% since the beginning of the year versus the S&P 500's gain of 19.6%.
Read the full article here
Apogee Enterprises (NASDAQ: APOG) latest stock valuation
So based on the earnings report of Apogee (NASDAQ: APOG) and what do we value Apogee (APOG) stock at? Based on the earnings reported and the fiscal guidance provided by the group our valuation model provides a target (full value) price for Apogee at $51.20 a stock. We therefore believe the Apogee is undervalued and the current price offers long term fundamental or value investors a good opportunity to buy Apogee stock at a good price.