Acuity Brands, Inc. AYI is scheduled to announce second-quarter fiscal 2025 results on April 3, before the opening bell.

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In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 2.1% and increased 6.7% year over year. Net sales missed the consensus mark by 0.04% but increased 1.8% from the prior year.

Acuity Brands beat earnings expectations in the trailing 19 quarters.

Acuity Brands Inc Price and EPS Surprise

Acuity Brands Inc price-eps-surprise | Acuity Brands Inc Quote

How Are Estimates Placed for AYI Stock?

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) has decreased to $3.66 from $3.67 in the past seven days. The estimated figure indicates an increase of 8.3% from $3.38 per share reported in the year-ago quarter.

The consensus mark for net sales is pegged at $1.02 billion, indicating a 12.9% increase from the year-ago reported figure.

Factors to Shape Acuity Brands’ Q2 Results

Acuity Brands’ earnings and revenues are expected to have increased year over year in the second quarter of fiscal 2025, driven by improvements in product vitality, service levels, technological advancements and new product innovations. The company’s focus on expanding its market presence and increasing control over new opportunities is likely to have aided the company’s performance in the to-be-reported quarter.

With the acquisition of QSC during the fiscal first quarter, Acuity Brands expanded its Intelligent Spaces portfolio with cloud-manageable audio, video and control solutions. This addition positioned the company for long-term revenue and earnings growth by enabling seamless control over building operations.

Segment-wise, for the to-be-reported quarter, our model predicts total ABL segment revenues to increase 1.9% year over year to $859.3 million.

Within the ABL segment, we expect Independent Sales Network, Direct Sales Network and Corporate Account revenues to increase 1.9%, 4%, 3.6% and 2.6%, respectively. However, Retail and Other revenues are expected to witness a 6.1% decline year over year.

The company has gained from its diversified portfolio of innovative lighting control solutions and energy-efficient luminaries. Its focus on Intelligent Spaces Group (“ISG”) products, which specialize in providing products and services that enhance the intelligence, safety and sustainability of spaces, bodes well. Our model predicts that the ISG segment’s revenues in the fiscal second quarter will increase by a solid 157.8% year over year to $175.6 million owing to the QSC buyout.

Acuity Brands' ongoing efforts to introduce new products and enhance existing ones are central to driving profitability. Notable launches, such as the TruWrap and REBL Round High-Bay, featured switchable technology that offered multiple functionalities and enabled higher-margin opportunities.

The company’s segmentation strategy—Contractor Select, Design Select, and Made to Order—has been helping the company align its products with customer needs while improving operational efficiency. This approach is expected to reduce costs for distributors, improve customer satisfaction by offering tailored, high-value solutions, and enhance productivity for design and electrical contractors, leading to better overall market performance. The company’s cost management, pricing strategies and productivity improvements are likely to have aided it in boosting margins. We expect the company’s adjusted EBITDA margin to improve 50 basis points to 17.4% in the fiscal second quarter from 16.9% a year ago.

What Our Model Indicates for AYI Stock

Our proven model predicts an earnings beat for Acuity Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

AYI’s Earnings ESP: The company’s earnings ESP is +0.68% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AYI’s Zacks Rank: Acuity Brands currently has a Zacks Rank #3.

Other Stocks With the Favorable Combination

According to our model, here are some other companies in the Zacks Construction sector that, too, have the right combination of elements to post an earnings beat in the quarter to be reported.

Martin Marietta Materials MLM has an Earnings ESP of +2.33% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Martin Marietta reported better-than-expected earnings in two of the last four quarters and missed on the remaining two occasions, the average negative surprise being 1.7%. Martin Marietta’s earnings for the first quarter of 2025 are expected to decline 4.2%, but revenues to grow 9.4% from the prior year.

MasTec MTZ currently has an Earnings ESP of +2.47% and a Zacks Rank of 3.

MasTec reported better-than-expected earnings in each of the last four quarters, the average surprise being 31.6%. MasTec’s earnings for the first quarter of 2025 are expected to grow 361.5% year over year.

Vulcan Materials VMC currently has an Earnings ESP of +8.13% and a Zacks Rank of 3.

Vulcan reported better-than-expected earnings in two of the last four quarters, the average surprise being 4.6%. Vulcan’s earnings for the first quarter of 2025 are expected to be 80 cents per share, the same as last year on 9.3% higher revenues.

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This article originally published on Zacks Investment Research (zacks.com).

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