Acuity Brands profit tops estimates in Q4

Lighting solutions provider Acuity Brands (AYI) reported a 20% jump in earnings for the fourth quarter, helped by higher sales volumes and productivity improvements. Higher volume and rise in acquisitions drove the top line higher. The Q4 results came in ahead of analysts’ expectations.

Net income climbed by 20% to $108 million, and earnings jumped 26% to $2.70 per share. Adjusted earnings rose 5% to $2.68 per share.

Net sales grew 11% to $1.06 billion, driven primarily by volume growth in its Contractor Select portfolio, Atrius-enabled luminaires, and Holophane solutions. The company experienced solid growth in net sales in most channels and geographies. Volume grew by 13%.

Gross profit rose by 1.3% as higher sales volumes and productivity improvements largely offset unfavorable price/mix, higher material, component, and freight costs.

For the last couple of quarters, the company has been seeing slowness in the commercial construction space that in-turn hurt its results. Also, Acuity has been experiencing lower demand for its products due to the availability of cheaper competitive products and higher competition.

The company remains cautiously optimistic for fiscal 2019. Third-party forecasts and leading indicators suggest that the North American lighting market, the company’s primary market, is predicted to be up low-single digits in fiscal 2019.

Acuity Brands estimates a fiscal 2019 annual tax rate of about 25% before any discrete items, assuming the tax rates in its taxing jurisdictions remain generally consistent throughout the year. Additionally, the company expects fiscal 2019 capital expenditures to be about 1.5% of net sales.

Shares of Acuity Brands ended Tuesday’s regular session up 0.37% at $155.48 on the NYSE. The stock had fallen over 11% in the year so far and more than 8% for the past year.