What happened 

Shares of lighting and controls company Acuity Brands, Inc. (NYSE:AYI) plunged as much as 14.8% in trading Tuesday after the company reported fiscal first-quarter 2018 results that missed expectations. At 11:05 a.m. EST, shares were still down 12.5% on the day. 

So what

Quarterly sales dropped 1% to $842.8 million, and net income dropped 12.5% to $71.5 million, or $1.94 per share on an adjusted basis, which pulls out one-time items. Wall Street analysts were expecting revenue of $884 million and earnings of $2.10 per share, so there was a big miss on both the top and bottom line

Person holding LED light bulb.

Image source: Getty Images.

Management blamed softness in most of its end markets for the decline in revenue and expects the market to improve. The recently passed tax bill was pointed to as one reason for bullishness, driven by provisions that will give companies incentives to spend money on capital expenses because of accelerated expensing starting in 2018. 

Now what

While results aren't impressive to start 2018, Acuity is still very profitable and well-positioned to benefit from investment in higher efficiency and better controls in the lighting industry. With that said, shares are pretty expensive at 21 times trailing earnings and stagnant results at the moment. If shares continue to dip, I would see it as a buying opportunity, but today shares are too expensive for me to jump in. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.