Apogee Enterprises' fiscal second-quarter earnings rose year over year while revenue fell as the architectural products and services provider increased its full-year bottom-line outlook. The company now expects adjusted earnings to be in a range of $4.90 to $5.20 per share for fiscal 2025, up from its previous guidance of $4.65 to $5.
Analysts predicted a normalized EPS of $4.83, and the stock spiked 7.8% in premarket activity following the announcement. Despite this positive outlook, Apogee continues to project sales to be down 4% to 7% for the ongoing fiscal year. Last week, the firm agreed to acquire coated substrates manufacturer UW Interco for $240 million in cash.
If the deal is completed by Nov. 1, Apogee anticipates roughly $30 million of incremental revenue and a $0.10 hit on adjusted EPS, mainly due to increased interest and amortization expense related to the acquisition. For the three months through August, adjusted earnings rose to $1.44 a share from $1.36 a year ago, while three analysts surveyed by Capital IQ expected $1.23.
Sales declined 3.2% year over year to $342.4 million, ahead of the $335.6 million consensus based on the same number of analysts. The topline decrease mainly reflects lower volume, partially offset by higher prices and mix, the company mentioned. Chief Executive Ty Silberhorn remarked, 'Our team achieved another strong quarter of profitability, delivering improved operating margins, adjusted EPS growth, and increased operating cash flow, despite volume pressure.' He highlighted that their stronger operating foundation, improved cost structure, and increased mix of differentiated offerings are all contributing factors to their results.
Revenue in the architectural framing business dropped 11% year over year to $141.4 million, while architectural glass and large-scale optical sales logged declines of 4.2% and 16%, respectively, weighed down by reduced volume. Conversely, architectural services revenue advanced to $98 million from $88.1 million in the prior-year quarter, buoyed by increased volume and a favorable mix of projects.
Gross margin improved by 140 basis points to 28.4%, aided by pricing and lower insurance-related costs. Selling, general, and administrative expenses ticked up 1% to $55.4 million. Price: 73.41, Change: +4.98, Percent Change: +7.28.