Daktronics, Inc. (DAKT) - Zacks #1 Rank Top Performers

Large screen video displays and electronic scoreboards are not exactly in great demand during difficult economic times – let alone during a "Great Recession". However, Daktronics, Inc. (DAKT), the world's largest supplier of such products, believes that it may be through the worst of the downturn, and it has a solid fiscal first quarter performance to prove it.

On Wednesday, shares of the company advanced a little more than 5%, which was enough to make the Zacks #1 Rank Top Performers List on a decent day for the market. Volume was more than 410,000 shares today, compared to the daily average of a little more than 306,000.

Earnings estimates for DAKT have turned around significantly since the Aug 24 earnings report on unanimous agreement among analysts. The report included a triple digit EPS surprise.

Daktronics has strong leadership positions in, and is the world's largest supplier of, large screen video displays, electronic scoreboards, LED text and graphics displays, and related control systems. The company designs, manufactures, markets and services display systems for customers around the world in sport, business, schools and theaters, and transportation segments.

On the Zacks #1 Rank List, DAKT is part of the electronic products – miscellaneous industry. There are 3 other companies from this space on the list, though they are not direct competitors of Daktronics. Nonetheless, those other 3 companies are Bel Fuse Inc. (BELFB), Cubic Corp. (CUB) and Siemens AG (SI).

Earnings Estimates for Daktronics

Perhaps the only good thing about stumbling through a deep recession is the eventual rebound in better times. In other words, it's cool to see charts like this one:

The Zacks Consensus Estimate for this fiscal year, which ends April 2011, is currently 18 cents per share. A month ago, analysts were expected a loss of a penny per share. That's a substantially sharp turnaround on the back of 4 upward revisions in the past 30 days, which also marks unanimous agreement.

As for next fiscal year, the Zacks Consensus Estimate is at 33 cents per share. Analysts weren't as bearish for this period as they were for the current period, but the outlook is still up more than 22% from 27 cents in the past month; again on unanimous agreement from 4 total estimates.

At the moment, analysts expect earnings per share to soar more than 83% for next fiscal year over this fiscal year. The sharp advance in estimates for this fiscal year suggests that this company's turnaround is coming sooner than many analysts had expected.

So What About that Fiscal First Quarter?

Daktronics earned 6 cents per share for its fiscal first quarter, which was 250% better than the Zacks Consensus Estimate at a loss of 4 cents. The company has been very volatile with regard to quarterly profit expectations, and this performance marks its first beat in 3 quarters.

However, net sales were down 11% to $100.5 million from last year's $113.5 million.

According to the company, those segments that turned down first in the economic slump appear to be the first to show signs of recovery, particularly the commercial, international and transportation units. In addition, DAKT announced that it received a significant order from a major outdoor advertising company that hadn’t place significant orders in the previous 12 months; a signal that the environment is improving.

Looking forward, the company expects net sales in the fiscal second quarter to rise slightly compared to the first quarter, despite the fact that much of its backlog remains scheduled past the second quarter. At the moment, the Zacks Consensus Estimate for the fiscal second quarter is 5 cents per share, up 3 cents in the past 30 days.

In addition to its Zacks #1 Rank, DAKT also enjoys a longer-term "Outperform" recommendation.

 
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