Lighting solutions provider Acuity Brands (AYI) reported a profit decline for the third quarter, in line with the sluggish lighting market. Profit was hurt by higher costs, fluctuation in product prices and the mix of products sold. However, both top and bottom line results beat analyst expectations for the quarter.
Net sales increased 5.9% to $944 million, helped by greater shipments of Acuity’s Atrius-based luminaires and higher shipments of products for infrastructure and utility projects. Profitability, on the other hand, declined by 11.19% to $73 million, while operating profit slumped 19.5% to $105.9 million. On a per share basis, earnings dipped 5.2% to $1.80, while on an adjusted basis, earnings jumped 10.2% to $2.37 per share.
The company has been seeing slowness in the commercial construction space which has been impacting its performance for the last couple of quarters. Moreover, availability of cheaper competitive products and increased competition is adding to the misery of lower demand for Acuity Brands’ products.
Despite the tough market conditions, the company is focused on bringing more innovative and attractive lighting solutions to the market. Acuity Brands also is optimistic about its markets and anticipates to return to growth in fiscal 2018 with its strategic focus on bigger projects and exploring new geographies.
The Atlanta-based company expects North American lighting market to improve modestly latter half of 2018 following the weaker demand the region has been experiencing for many quarters now.
“We believe the pricing environment will continue to be challenging in portions of the market, particularly for more basic, lesser-featured products sold through certain sales channels as well as shifts in product mix, both of which are expected to continue to negatively impact net sales and margins,” said Vernon Nagel, CEO.
The company’s stock jumped as much as 14% post the earnings release, while declined on the initial gains increasing more than 10% in pre-market trading. When the market opened today, shares surged more than 15%.