Glassmaker Apogee's earnings beat forecast

Glassmaker Apogee Enterprises Inc. said strong condo and office construction and higher demand for picture framing boosted first-quarter earnings ahead of expectations, and the company lifted earnings guidance for the rest of the year.

Apogee increased its full-year 2006 earnings guidance to between 74 and 80 cents a share, up from the previous range of 72 to 76 cents a share.

"We started the fiscal year exceeding our expectations and are optimistic that momentum is building," CEO and Chairman Russell Huffer told analysts Tuesday during a conference call. First-quarter earnings, released late Monday, show that income from continuing operations rose 27.5 percent to $3.9 million or 14 cents a share. Revenue rose 12 percent from a year ago to $164 million.

The company, which is de-emphasizing its less profitable auto-glass unit, saw sales of architectural building glass jump 15 percent during the quarter thanks to unexpected strength in the construction of high-end condos, government buildings, institutional work and offices. Orders for these customer segments surged around Apogee's line of energy efficient, blast- and hurricane-resistant glass products, officials said.

The company is also benefiting from stronger sales of its picture-framing glass, which is increasingly replacing the company's once prominent niche in consumer electronics glass products. Huffer told analysts that sales for the latter segment will soon dwindle to 10 percent of company sales. Meanwhile, framing glass, sold through outlets such as Michael's crafts and framing stores, saw a 12 percent rise in sales to $20.8 million as customers chose higher-margin glass.

Apogee's auto-glass replacement sales continued to drop during the quarter, falling 12 percent to $8.6 million. Earnings for the segment also fell from $1.1 million a year ago to $100,000.

600450 Glassmaker Apogee's earnings beat forecast
Date: 23 June 2005

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