AZZ Q3 Profit Rises, Narrows 2015 EPS Outlook

(RTTNews) - Electrical equipment and components maker AZZ, Inc. (AZZ) reported Friday a profit for the third quarter that grew from last year, reflecting improved operating margins and double-digit revenue growth in both business lines.

Quarter net sales missed analysts' expectations. The company also narrowed earnings guidance range for the full-year 2015, while lowering annual revenue outlook.

"Financial results for the third quarter were solid. We achieved double-digit revenue increases in both of our business lines, Energy Segment margins expanded as we gained traction on driving operating efficiencies, and we achieved selective pricing improvements," President and CEO Tom Ferguson said in a statement.

The Fort Worth, Texas-based company reported net income of $19.97 million or $0.77 per share for the third quarter, higher than $18.45 million or $0.72 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $19.52 million or $0.75 per share, compared to $15.23 million or $0.59 per share in the year-ago quarter.

Revenues for the quarter grew 13.7 percent to $224.83 million from $197.76 million in the same quarter last year, but missed four Wall Street analysts' consensus estimate of $230.20 million.

Energy revenues increased 16.1 percent to $130.05 million, and galvanizing Services revenues improved 10.6 percent to $94.78 million from the year-ago quarter.

Products backlog at the end of the quarter was $300.3 million, up 3.6 percent from $290.0 million at the end of the year-ago quarter. Incoming orders for the quarter were $193.7 million resulting in a book to ship ratio of 0.98.

The company noted that consolidated operating margins improved 180 basis points to 14.6 percent from last year's 12.8 percent.

Looking ahead to fiscal 2015, the company said it is narrowing earnings guidance to a range of $2.40 to $2.60 per share from the prior $2.40 to $2.80 per share range. The company is also lowering revenue forecast to a range of $825 million to $850 million from the previous $850 million to $900 million range. Street is currently looking for full-year 2015 revenues of $857.21 million.

"We are firmly committed to driving operational excellence and seeking fundamentally sound growth opportunities that will enhance our product offerings as well as our global reach. As we look forward, AZZ is well positioned to successfully compete both domestically and internationally with a solid portfolio of products, services and innovative solutions to meet the needs of a global customer base," Ferguson added.

AZZ closed Thursday's regular trading session at $45.41, up $1.06 on a volume of 0.20 million shares.