Apogee Enterprises Inc (NASDAQ:APOG) stock rallies 22.26% (As on October 4, 11:24:25 AM UTC-4, Source: Google Finance) after the company reported better-than-expected second quarter results and raised its full-year earnings guidance. Gross margin improved 140 basis points to 28.4%, primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, and lower insurance-related costs, partially offset by the unfavorable sales leverage impact of lower volume, higher compensation and benefit expense, and $0.9 million of restructuring costs associated with Project Fortify. Operating income increased to $42.0 million, and operating margin was 12.3%. Adjusted operating income grew 6.4% to $43.1 million and adjusted operating margin improved by 110 basis points to 12.6%. The higher adjusted operating margin was primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, and lower insurance-related costs, partially offset by the impact of higher incentive compensation expense and the unfavorable sales leverage impact of lower volume.
Moreover, Architectural Framing Systems net sales were $141.4 million, compared to $158.8 million, primarily reflecting reduced volume due to exiting certain lower-margin product lines as part of Project Fortify, and lower end-market demand. Architectural Glass net sales were $90.1 million, compared to $94.1 million, reflecting reduced volume due to lower end-market demand, partially offset by improved pricing and product mix. Architectural Services net sales grew 11.3% to $98.0 million, primarily due to a more favorable mix of projects and increased volume. Large-Scale Optical net sales were $19.8 million, compared to $23.6 million, primarily reflecting lower volume in the retail channel, partially offset by a more favorable mix.
APOG in the second quarter of FY 24 has reported the adjusted earnings per share of $1.44, beating the analysts’ estimates for the adjusted earnings per share of $1.23. The company had reported the adjusted revenue decline of 3.2 percent to $342.4 million in the second quarter of FY 24, beating the analysts’ estimates for revenue of $335.3 million.
Looking ahead, Apogee raised its fiscal 2025 adjusted EPS guidance to a range of $4.90 to $5.20, up from its previous outlook and above the $4.83 consensus. The company continues to expect full-year revenue to decline 4-7%.
Meanwhile, the company also recently announced the acquisition of UW Solutions, which it expects to drive long-term growth. The company assumes closing of the UW Solutions acquisition on November 1, 2024.