Apogee Shares Up on Strong Q4 Earnings – Analyst Blog

Shares of Apogee Enterprises, Inc. ( APOG ) rose 4.5% as the company reported fourth-quarter fiscal 2014 earnings of 27 cents per share, up 80% from 15 cents earned in the prior-year quarter. However, earnings lagged the Zacks Consensus Estimate of 31 cents.

Total revenue increased 19% year over year to $214 million in the quarter but fell short of the Zacks Consensus Estimate of $217 million.

Operational Update

Cost of goods sold increased 17% to $167.5 million in the quarter. Gross profit improved 29% to $46.9 million. Gross margin increased 170 basis points (bps) to 21.9%. Selling, general and administrative (SG&A) expenses rose 16% year over year to $34.8 million. Operating income was $12.1 million, which grew a whopping 97% from $6.1 million earned in the year-ago quarter. Operating margin rose 320 bps to 6.4%.

Segment Performance

Revenues from the Architectural Glass segment increased 9% year over year to $75.7 million with growth in the U.S. and Brazil. Operating income in the quarter was $0.1 million, turning around the loss of $0.4 million in the prior year quarter, aided by improved mix and pricing, partially offset by timing of expenses and increased incentive compensation.

Revenues from the Architectural Services segment increased 22% year over year to $63.5 million. The segment reported an operating profit of $5.9 million, improving twofold from $2.8 million in the year-ago quarter. Growth in the top and bottom lines was owing to favorable project timing and cost flow, along with improving project margins.

Architectural Framing Systems' revenues increased 41% year over year to $63 million, with 16% organic growth. The segment's operating income increased to $1.9 million, turning around the year-ago quarter loss of $0.2 million. Improved performance in the window business drove the results.

Large-Scale Optical Technologies segment's revenues remained flat at $19.2 million due to softness in the retail market, which resulted from a severe winter, partially offset by sales growth in the fine art and museum market. Operating income in the reported quarter was $5.2 million, up 30% year over year due to reduced expenses and a strong mix of higher value-added framing products.

Financial Position

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Apogee Shares Up on Strong Q4 Earnings - Analyst Blog