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Acuity Tumbles After Warning of Cost Pressure on Materials -Breaking

by Mike Robinson

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© Reuters

By Dhirendra Tripathi

Investing.com – Acuity Brands stock (NYSE:) plunged 9% Tuesday after the lighting products maker cited cost increases and shortages of raw materials as major challenges.

The company uses steel and aluminum to make its products, and prices of both of those materials have climbed to record highs in recent times in the wake of Russia’s invasion of Ukraine. The company is also concerned about a shortage of microchips.

MarketWatch.com reports that the company decided to not apply price hikes to its backlog and instead honored original agreements. Even though margins were eroded during the second quarter, this is still a good decision.

In a conference phone call with analysts, Neil Ashe stated that the backlog of his company had increased slightly over last quarter. Assuming that labor negotiations at West Coast ports can be resolved quickly, Ashe said transportation costs will decrease.

Sales in the second quarter ending February 28, 2018, rose by 17%, to reach $909 million.

The adjusted diluted profit per share increased 21% to $2.57

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