AZZ Shines in Q1 on Metal Coatings Momentum, Boosts Outlook

Benzinga07-09 20:44

AZZ Inc. (NYSE:AZZ) shares are trading higher premarket on Thursday after the company reported better-than-expected first-quarter results and raised its fiscal year 2027 guidance on Wednesday.

Earnings Results

Revenue rose 6.3% year over year (Y/Y) to $448.5 million, above the street view of $434.5 million.

Adjusted EBITDA declined to $99.5 million from $106.4 million in the prior-year quarter. This is primarily due to the inclusion of $7.7 million in equity earnings from AVAIL JV operations in the first quarter of the previous year.

Read Also: Top Wall Street Forecasters Revamp AZZ Expectations Ahead Of Q1 Earnings

Adjusted EPS of $1.85 surpassed the analyst estimate of $1.69.

The company generated $37.1 million in operating cash flow during the quarter, supported by improved earnings and disciplined working capital management.

The company returned $6.0 million to shareholders through dividends and invested $18.7 million in capital expenditures.

Segment Performance

In the Metal Coatings segment, sales rose 12.3% Y/Y, driven by higher volumes across construction, industrial, and infrastructure markets. Segment Adjusted EBITDA margin stood at 30.3%, down 260 basis points due to prior-year land sale benefits and a higher mix of large projects in the current period.

In the Precoat Metal segment, sales increased 1.5% Y/Y to $238.2 million, aided by stronger contributions from the Washington, Missouri facility and recovery of higher paint and input costs. Segment EBITDA margins improved 100 basis points Y/Y to 21.7%, driven by higher sales.

Fiscal Year 2027 Outlook

The company raised its adjusted EPS outlook to $6.75-$7.15 from $6.50-$7.00 earlier, compared with the consensus estimate of $6.84.

AZZ also increased its revenue guidance to $1.80 billion-$1.85 billion from $1.725 billion-$1.775 billion earlier, exceeding the analyst estimate of $1.75 billion.

Also, the company expects capital expenditure to be approximately $80 million-$100 million.

AZZ Price Action: Azz shares were up 8.53% at $155.59 during premarket trading on Thursday. The stock is approaching its 52-week high of $162.19, according to Benzinga Pro data.

Photo via Shutterstock 

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