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What’s in Store for Apogee (APOG) Stock in Q2 Earnings?


Apogee Enterprises, Inc. APOG is slated to release second-quarter fiscal 2019 results on Sep 18, before the opening bell.

In the last reported quarter, Apogee’s earnings beat the Zacks Consensus Estimate. The trailing four-quarter average earnings surprise of the stock is 0.88%.

Let’s see how things are shaping up for this announcement.

Apogee Enterprises, Inc. Price and EPS Surprise

Apogee Enterprises, Inc. Price and EPS Surprise | Apogee Enterprises, Inc. Quote

Key Factors to Consider

Apogee’s fiscal second-quarter results are expected to reflect benefits from strong order activity. Notably, order activity for Architectural Glass segment grew substantially during first-quarter fiscal 2019. This will drive the segment’s sales and the company expects its revenues to reflect 15-20% growth, sequentially, in the fiscal second quarter. Apogee also continues to win in the mid-size market and regain large project works which will also boost sales in the upcoming period.

The Zacks Consensus Estimates for Apogee’s earnings per share is pegged at 75 cents for the fiscal second quarter, up around 25% year over year. The Zacks Consensus Estimate for revenues for the September-end quarter is pegged at $359 million, representing a year-over-year improvement of 4.4%.

We believe Apogee’s performance in the to-be-reported quarter will reflect support from encouraging industry fundamentals. Favorable lending in the non-residential construction market and stable office vacancy rates remain positive factors. Also, job growth continues in the office-occupying sectors: education, healthcare, and hospitality, which are vital for Apogee.

However, Apogee’s gross margins contracted 180 basis points year over year in the fiscal first quarter, mainly due to the inclusion of the EFCO business, which has lower margins. The company expects this business to witness negative margins in the fiscal second quarter due to delays in achieving operational improvements from the acquisition. Also, tariffs on aluminum and steel goods and cost increases in freight and lumber will likely weigh on the company’s margins.

Apogee’s shares have significantly outperformed the industry over the past year. The stock has gained around 9% as against the 21% loss recorded by the industry.

Zacks Rank & Key Picks

Apogee carries a Zacks Rank #3 (Hold).

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Caterpillar Inc. CAT, with an Earnings ESP of +0.96% and a Zacks Rank #1 (Strong Buy). The stock has rallied 21% in a year’s time. You can see the complete list of today’s Zacks #1 Rank (String Buy) stocks here.

Alarm.com Holdings, Inc. ALRM, with an Earnings ESP of +5.07% and a Zacks Rank #2 (Buy). Its shares have gained 29% in the past year.

Flowserve Corporation FLS, with an Earnings ESP of +1.94% and a Zacks Rank #2. The company’s shares have been up 32% over the past year.

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