Apogee Enterprises Inc (NASDAQ: APOG) stock plunged 11.90% on September 18th, 2018 after the company has reduced the full year 2019 outlook, primarily due to lower than expected second quarter results and decreased profit expectations for Architectural Glass. The company now expects to report full year adjusted earnings per share to be in the range of $3.13 to $3.33, compared to prior guidance of $3.48 to $3.68. For FY 19, the company expects the revenue growth to be in the rangee of 8 to 10 percent, compared to approximately 10 percent previously. The company now expects the operating margin to be in the range of 8.3 to 8.8 percent, compared to 8.9 to 9.4 percent previously. Adjusted FY19 earnings guidance excludes the after-tax impact of amortization of short-lived acquired intangibles associated with the acquired backlog of Sotawall and EFCO of $3.8 million ($0.13 per diluted share). In 2019, capital expenditures is expected to be of $60 to $65 million and tax rate to be of approximately 24 percent
During the second-quarter 2019, the revenue grew 5.3 percent to $362.1 million, driven by strong growth in Architectural Services, partially offset by lower revenue in Architectural Glass. The adjusted operating income was $29.7 million, compared to $34.1 million in the prior year, primarily due to lower margins in Architectural Glass, partially offset by continued margin improvements in Architectural Services. Adjusted EBITDA was $42.1 million in Q2 2019, compared to $47.8 million in last year’s second quarter. The company has posted the adjusted earnings of $0.75 per diluted share, which is in-line with the prior year. Year-to-date cash provided by operating activities was $47.9 million, up 17 percent over $40.8 million in the prior year.
Moreover, during the second quarter of 2019, the Architectural Glass segment faced significant challenges as it ramped up production to meet faster than expected demand increases. This caused the business to fall well short of the company’s expectations. Further, over the past few quarters APOG have been anticipating a rebound in the Glass business. As the company saw increased bidding and customer commitments, the company continued to win in the midsized market and APOG has regained share in large projects.
Additionally, Services backlog remains strong and the segment is fully booked for the remainder of fiscal 2019 and much of fiscal 2020. Services turned in 10% operating margin from 7.3% in the first quarter.