Glassmaker Apogee Enterprises (NASDAQ: APOG) inventory is getting hit arduous in Tuesday-morning buying and selling, down 16.5% by means of 11:11 a.m. ET regardless of reporting better-than-expected gross sales and earnings this morning.
Heading into the fiscal Q3 2025 report, analysts anticipated Apogee to earn adjusted income of $1.11 per share on $332.2 million in gross sales. In truth, Apogee says it earned $1.19 per share on gross sales of $341.3 million.
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Apogee’s Q3 earnings
A part of the rationale buyers are most likely upset by Apogee’s numbers is the truth that, regardless of “beating” on gross sales, the corporate’s revenues grew solely 0.5% yr over yr — and that solely as a result of the corporate acquired substrates firm UW Interco, including its income stream to Apogee’s personal.
Additionally, the corporate’s precise earnings, as calculated in keeping with usually accepted accounting rules (GAAP), have been solely $0.96 per share, a lot lower than the “adjusted” earnings the corporate highlighted. Working revenue margins deteriorated in a giant approach, falling 270 foundation factors to simply 8.4%. On the underside line, GAAP internet revenue was down 22% yr over yr.
CEO Ty Silberhorn blamed the weak outcomes on “continued strain from comfortable demand in our finish markets,” leading to “decrease quantity [and] a less-favorable product combine, primarily in Architectural Framing Methods.” On the similar time, shopping for UW Interco added “acquisition-related bills” that harm revenue margins.
Is Apogee inventory a promote?
Traders should not count on issues to get higher anytime quickly. Looking forward to the tip of its fiscal 2025, Apogee administration foresees full-year gross sales falling about 5% (once more, regardless of the optimistic contribution from buying UW Interco), with weak demand persevering with to affect gross sales in fiscal This autumn.
However, Apogee nonetheless expects to earn not less than $4.90 per share this yr on a GAAP foundation, and maybe a bit extra. On a $59-ish share worth, that works out to a price-to-earnings ratio of simply 12x. That ought to look fairly low-cost — if Apogee can simply work out a solution to get its enterprise rising once more.
After all, in the meanwhile, that’s exactly the problem that’s weighing Apogee inventory down.
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