What can I say? They did it again.
Nearly three months ago, I found myself pondering the way some companies grow into their names. For example, there was Netflix
Reporting earnings late Tuesday, the company blew out the windows on not only the Wall Street Wise Men's estimates, but its own as well:
- Revenue grew 12% to $209.9 million versus expectations of $207 million.
- Profits from continuing operations doubled to $0.34 a share.
The company accomplished this by following a tack we've seen before at firms like American Woodmark
Looking forward, Apogee predicts its margins will decline over the course of the full year, ending up somewhere between 6.6% and 6.9%, below last year's near-record 7.1%. But with revenue continuing to climb, management nonetheless felt confident in raising guidance for the full year. By the end of fiscal 2008, Apogee believes it will have booked $1.37 to $1.47 per share in profits on 11% to 14% sales growth.
One final point: I made a point of critiquing the firm's free cash flow generation earlier this week, observing that rising capital investments were eating up most of its operating cash flow. There's good news and bad news on that front. The good news is that Apogee's operating cash flow of negative $3.2 million was less negative than in fiscal Q1 2007. The bad news is that, as expected, capex nearly doubled, and management raised its estimation of total capital costs for the full year to $60 million. Despite Apogee's rising fortunes, Fools should keep low expectations on the free-cash-flow front for the remainder of the year.
For more crystal-clear analysis of the glassmaker's progress, read:
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