(By Balaseshan) Acuity Brands Inc. (NYSE: AYI), a provider of lighting fixtures and control systems, reported a lower-than-expected first quarter earnings due to a lull in the nonresidential construction market demand as well as costs associated with closure of its production facility.
AYI is trading down 6.58% at $64.43 on Tuesday.
Earnings for the first quarter were $26.1 million or $0.61 per share, down from $29.9 million or $0.70 per share last year. Adjusted earnings per share (EPS) fell to $0.69 from $0.74.
Sales rose 1.4% to $481.1 million, due primarily to an increase in volume, partially offset by a slightly net unfavorable change in product prices and the mix of products sold.
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Analysts, on average, polled by Thomson Reuters had expected a profit of $0.81 per share on revenue of $498.79 million for the first quarter.
Adjusted gross margin decreased 40 basis points to 40.4%, due primarily to an increase in expenses associated with new product introductions and higher manufacturing costs related to slight changes in the mix of products sold.
Looking ahead, the closure of the Cochran, Georgia production facility is expected to be principally completed by the end of the second quarter of fiscal 2013. The company expects to incur additional costs of about $4 million associated with the closure of the facility, which are forecasted to be incurred primarily in the second quarter.
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The company anticipates that the Cochran facility will totally cease production by the end of the second quarter and no further costs related to this streamlining effort will be incurred thereafter.
Acuity estimates that the total annualized pre-tax savings associated with all streamlining activities initiated in 2012, including the closure of the Cochran facility, to be about $14 million of which about $4 million was realized in fiscal 2012.
"As we look to the second quarter, typically our softest due to seasonality, we expect demand to continue to be inconsistent. Due to the recent slowdown in the rate of growth over the past several months, we believe the growth rate for the North American lighting market may be tempered somewhat to the low to mid-single digit range," said Vernon Nagel, Chief Executive of Acuity Brands.
The stock has been trading between $48.11 and $71.59 for the past 52 weeks.