AZZ Inc. has lifted its full-year earnings outlook, a decision announced late Wednesday, as the metal and coil coatings company's fiscal second-quarter results outperformed Wall Street estimates despite sales dipping below market expectations. The company now anticipates adjusted per-share earnings to be between $4.70 and $5.10 for fiscal 2025, an increase from prior projections that ranged from $4.50 to $5.
AZZ continues to forecast a robust sales range of $1.53 billion to $1.63 billion. The current consensus from Capital IQ is for normalized EPS of $4.93 and an estimated revenue of $1.61 billion. For the three-month period ending in August, AZZ reported that its adjusted earnings per share surged 7.9% year-over-year, rising to $1.37 and exceeding the Street's forecast of $1.31.
Sales for the quarter rose to $409 million from $398.5 million in the same period last year, although they faltered slightly against the estimates of approximately $412 million from six analysts surveyed by Capital IQ. Following the announcement, the stock experienced a 1.9% decline in premarket trading on Thursday. The metal coatings segment recorded a modest 1% growth in sales, reaching $171.5 million, thanks to what the company described as "slightly increased" volumes supported by infrastructure spending initiatives.
Meanwhile, the precoat metals business displayed a stronger performance, advancing 3.8% to $237.5 million, bolstered by heightened volume and growth in critical end markets such as construction, heating, ventilation, air conditioning, and transportation. "Consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved to 22.5%, primarily attributed to higher volume for hot-dip galvanized steel and coil-coated products alongside operational efficiency compared to the previous year," stated Chief Executive Tom Ferguson in a public statement.
Furthermore, selling, general, and administrative expenses saw a decline to $35.9 million, a slight decrease from $36.2 million in the prior year. During the fiscal year-to-date, AZZ's cash from operations amounted to $119.4 million, which enabled the company to decrease its debt by $45 million by the end of the second quarter.
CEO Ferguson expressed confidence, stating, "We are on pace to exceed our previously stated target debt reduction range of $60 million to $90 million, with expectations of reducing debt by at least $100 million by the end of this fiscal year." As of the latest report, the stock price stands at $80.05, reflecting a change of -1.52 or a percentage decline of -1.86..