AZZ Q2 Profit Declines, But Meets View; Backs 2015 Outlook

(RTTNews) - Electrical equipment and components maker AZZ, Inc. (AZZ) reported Wednesday a profit for the second quarter that declined from last year, reflecting charges and lower margins. Adjdusted earnings per share matched analysts' expectations, while quarter net sales missed their estimates. The company also reaffirmed its earnings and sales guidance for the full-year 2015.

"Financial results for the second quarter were mixed as bookings grew and the revenue levels reflected the seasonal nature of our business, but the margins were disappointing. Although I am not satisfied with the results for this quarter, I do recognize that margins were impacted by a number of operating inefficiencies within our Energy Segment," President and CEO Tom Ferguson said in a statement.

The Fort Worth, Texas-based company reported net income of $13.77 million or $0.53 per share for the second quarter, lower than $16.36 million or $0.64 per share in the prior-year quarter.

Results for the latest quarter include realignment charges of $0.11 per share taken to cover costs in management headcount reduction and the recognition of the write off of certain fixed assets.

Excluding items, adjusted net income for the quarter was $16.29 million or $0.63 per share, compared to $14.68 million or $0.57 per share in the year-ago quarter.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 1.9 percent to $193.42 million from $189.78 million in the same quarter last year, but missed four Wall Street analysts' consensus estimate of $208.18 million.

Energy net sales declined 3.4 percent to $100.6 million, while galvanizing Services net sales improved 8.4 percent to $92.86 million from the year-ago quarter.

Products backlog at the end of the quarter was $329.1 million, up 11.9 percent from $294.0 million at the end of the year-ago quarter. Incoming orders for the quarter were $213.4 million.

The company noted that consolidated operating margins declined on exceptional operating items.

Looking ahead to fiscal 2015, the company continues to project earnings in a range of $2.40 to $2.80 per share, on annual revenues between $850 million and $900 million. Street is currently looking for full-year 2015 earnings of $2.62 per share on revenues of $860.86 million.

"Quoting activity continues to improve and the growth in current backlog in our Energy Segment gives us confidence that the second half of fiscal 2015 looks quite promising. We are seeing signs of improvement in our served markets, and continued strength in petrochemical and refining markets," Ferguson added.

AZZ closed Tuesday's regular trading session at $41.77, down $1.02 on a volume of 0.30 million shares.