Shares of lighting and building management solutions company Acuity Brands, Inc. (NYSE:AYI) jumped as much as 19.3% in trading Tuesday after reporting fiscal third-quarter 2018 results. Shares fell slightly as the day went on but were trading 12.4% higher at 12:30 p.m. EDT.
Revenue was up 5.9% in the quarter to $944 million and net income fell 11.2% to $73 million, or $1.80 per share. On an adjusted basis, which pulls out one-time items, earnings were $2.37 per share, up 10.2% versus a year ago.
Analysts were only expecting $898.9 million in revenue and $2.17 per share in adjusted earnings, so this was a big earnings beat for Acuity. Management said they expect the lighting market to "improve modestly" in the second half of the year, which is a mildly bullish sentiment coming out of a solid quarter.
I wouldn't overreact too much about a single quarter of Acuity Brands because the company's performance is very volatile. It was only three months ago that shares plunged double digits on a weaker than expected quarter. As good as third-quarter results looked today, the stock is only up because results beat expectations. In the fiscal fourth quarter, revenue expectations are $970 million and earnings are expected to be $2.62 per share. If growth doesn't continue, the stock could give back gains, so investors would be wise to look at Acuity's long-term growth trends rather than focus on today's results alone.