Acuity Brands  (AYI) - Get Report shares slumped after the provider of lighting and building management products reported a drop in earnings that was worse than analysts expected

For the fiscal 2020 first quarter ended Nov. 30, the Atlanta company reported net income of $57 million, down 28% from $79.6 million in the year-earlier period. Earnings per share fell to $1.44 from $1.98. Adjusted earnings per share slid 8.2% to $2.13. Analysts surveyed by Zachs estimated $2.17 on average.

Sales totaled $834.7 million, down 11% from $932.6 million a year earlier. The Zacks survey estimated $873.4 million.

On the cost side, Acuity cited rises in share-based-payment expense and in special charges for streamlining.

Acuity CEO Vernon Nagel owned up to the numbers. “While we expected our first-quarter net sales to be down compared with the prior year, the decline was greater than previously forecast due to weaker-than-expected market demand,” he said.

“We experienced lower activity of large projects in various key areas such as commercial, renovation, and infrastructure.” 

Price increases and efforts to “reduce our exposure to products whose profitability has been most negatively impacted by tariffs” hurt, Nagel said.

He lauded the fact that the company’s adjusted-operating-profit margin was little changed. “We continued to generate strong cash flow from operations,” he said.

Still, Nagel expressed an uncertain outlook. “We remain cautious about overall market conditions within the lighting industry for the remainder of our fiscal 2020, primarily due to continued economic uncertainties caused by global trade issues, including tariffs,” he said.

“We also expect to continue to have top-line headwinds associated with the pruning of products that do not meet our profitability objectives, primarily in the retail channel.”

Acuity shares at last check stood at $125, down 13%.