NEW YORK (TheStreet) -- Shares of Acuity Brands Inc. (AYI - Get Report) are down -11.46% to $122.40 after the company reported 2014 third quarter revenue and earnings that came in below analysts' expectations.
The company, which provides lighting solutions for commercial, industrial, institutional, and residential applications, posted third quarter earnings of $43.8 million, or $1.01 per share, missing the FactSet consensus estimate of $1.13 per share.
Acuity Brands' sales for the most recent quarter was $603.9 million, compared to the consensus estimate of $609 million.
Separately, TheStreet Ratings team rates ACUITY BRANDS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACUITY BRANDS INC (AYI) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 12.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, AYI has a quick ratio of 1.95, which demonstrates the ability of the company to cover short-term liquidity needs.
- ACUITY BRANDS INC has improved earnings per share by 31.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ACUITY BRANDS INC increased its bottom line by earning $2.94 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $2.94).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Electrical Equipment industry average, but is less than that of the S&P 500. The net income increased by 32.4% when compared to the same quarter one year prior, rising from $24.70 million to $32.70 million.
- Powered by its strong earnings growth of 31.57% and other important driving factors, this stock has surged by 83.67% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: AYI Ratings Report