Acuity Brands (NYSE: $AYI) released its fourth quarter fiscal 2024 results on Tuesday, before markets opened, to a positive market reception. The building management solutions company beat estimates and saw growth across all its segments.
Acuity Brands Beats Estimates In Q4 Results
Atlanta-based Acuity Brands reported revenue of $1.03 billion in the fourth quarter, a 2.2% year-over-year increase and above estimates of $1.02 billion. Its adjusted EPS rose 8% year over year to $4.30, beating estimates of $4.27.
Its fourth-quarter adjusted operating profit rose by $16.2 million to $178.5 million, for an adjusted operating margin of 17.3%, a 120-basis-point increase compared to last year.
Full Year Performance
For the full year, Acuity Brands reported revenue of $3.8 billion, a 3% year over year decline, while the adjusted full year EPS came in at $15.56, a 10.7% year over year increase. The full-year adjusted operating profit came in at $639.6 million, a 42.2 million increase compared to last year. Its adjusted operating margin came in at 16.7%, a 160 basis point increase year over year.
Segment Performance
ABL
The Acuity Brands Lighting and Lighting Controls (ABL) segment reported a 1.1% increase in fourth-quarter revenue to $955 million. It saw a 13.2 million increase in adjusted operating profit to $171.9 million. The ABL segment reported an adjusted profit margin of 18%, a 120 basis points increase compared to last year.
The segment’s full-year revenue came in at $3.6 billion, a 4% decline year over year, while the adjusted operating profit was $624.2 million, a 5.7% YoY increase. ABL’s full-year adjusted operating margin was 17.5%, a 160-basis points year-over-year increase.
ISG
The Intelligent Spaces Group (ISG) segment saw fourth-quarter revenue rise 16.7% year over year to $83.9 million, while the adjusted operating profit rose $7.3 million to $21.5 million in Q4. The ISG segment reported a Q4 adjusted operating margin of 25.6%.
Full-year revenue for the ISG segment rose 15.5% year over year to $291.9 million, while the adjusted operating profit rose $13.3 million from last year to $63.4. ISG’s full-year adjusted operating margin was 21.7%.
Other Financial Highlights
For the full year, Acuity Brands reported $619.2 million in net cash from operations, a $41.1 million increase year over year. IT ended the year with a free cash flow of $555.2 million and cash and cash equivalents of $845.8 million.
During fiscal 2024, the company bought back $89 million of its shares. For the fourth quarter, it paid a dividend of $0.15 per share.
Fiscal 2025 Guidance
While Acuity Brands did not provide specific figures for fiscal 2025, it stated its focus is sustaining the margin expansion and cash flow generation. To do this, it will leverage its strategic initiatives amid ongoing economic uncertainty.
Acuity Brands (AYI) Hits New 52-Week High
On Friday, September 27, 2024, AYI shares hit a new 52-week high of $275.95. The stock has had an impressive performance in recent months, rising 34.45% year to date and 61.70% in the past 12 months. Following the stellar Q4 results, the stock was up 2.76% to $283.00 per share, a few minutes to the opening bell.
The surge to new highs is a testament to the high demand for its products and services and positive sentiment regarding its future. Its recent Q4 results, which beat estimates, will bolster confidence, potentially leading to new highs in the coming months.
Analysts are cautiously optimistic about Acuity Brands’ future, giving it a moderate buy rating. They forecast a wide range of price targets in the next 12 months, with a high of $315 and a low of $280. Their average price target of $294.67 is a 7% upside based on Monday’s closing price of $275.39.
Is Acuity Brands A Great Pick?
Acuity Brands’ recent Q4 performance demonstrated its dominance in the lighting and building management solutions sector. Its balance sheet shows a company in great financial health, with more cash than debt. Additionally, it has sufficient cash flow to cover interest payments, explaining the strong investor confidence in the stock’s future.
Based on these factors and its strong market performance, adding Acuity Brands to your portfolio could lead to positive long-term outcomes, even though the stock is trading near its 52-week high.
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