Acuity Brands profit misses on higher costs
(Reuters) - Lighting fixtures maker Acuity Brands Inc (AYI.N) posted a second-quarter profit that missed estimates on higher material costs and said it expected volatility in demand and commodity costs for the rest of the year.
Shares of the company fell as much as 10.6 percent in morning trade.
The company makes luminaries, lighting control systems and related products, and has been raising prices to cope with higher costs of raw materials like steel and copper.
Acuity's second-quarter sales rose 10 percent to $457.7 million, ahead of the $455.4 million that analysts were expecting. Changes in product pricing and product mix contributed to a 3 percent rise in sales, the company said.
However, the rise in revenue was offset by a similar increase in the company's costs.
Cost of goods sold increased 9.3 percent to $275.8 million, while selling, distribution and administration expenses were up 8 percent at $136.3 million.
The company "continues to anticipate on-going volatility in both customer demand and commodity costs" in the remaining two quarters, it said.
Profit was also hit by a special pre-tax charge of $6.6 million, or 11 cents a share, related to job cuts in Spain and its planned closing of operations in Cochran, Georgia.
Acuity's Spanish business continued to be affected by difficult economic conditions in the country and reported an adjusted operating loss of 3 cents a share during the quarter. Revenue from Spain halved to $2.6 million.
Chief Executive Vernon Nagel said he expected a "modest operating loss" for the Spanish operations in the third quarter as well.
In the quarter ended February, Acuity's net income fell to $19.5 million, or 46 cents a share, from $19.9 million, or 45 cents a share, a year ago.
Excluding one-time items, it earned 57 cents per share, below the 62 cents analysts had expected according to Thomson Reuters I/B/E/S.
Acuity, which owns brands such as Synergy Lighting Controls, Lithonia Lighting, Holophane and Gotham, had acquired Healthcare Lighting Inc and Horizon Control Inc last year to expand its specialized products portfolio.
Shares of the Atlanta-based company were down about 8 percent at $58.32 on the New York Stock Exchange on Wednesday.
(Reporting by Kartick Jagtap in Bangalore; Editing by Sreejiraj Eluvangal)