LONDON, UK / ACCESSWIRE / October 12, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on AZZ Inc. (NYSE: AZZ), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=AZZ, following the Company's posting of its second quarter fiscal 2018 financial results on October 03, 2017. The Electrical equipment manufacturer reported a y-o-y decline in sales and earnings. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

For the three-month period ended August 31, 2017, AZZ reported revenues of $190.4 million compared to $195.0 million for Q2 FY17, down 2.4% on a y-o-y basis. The Company's revenue numbers topped analysts' expectations of $190 million.

For Q2 FY18, AZZ's gross margins were 21.8% compared to 21.5% in Q2 FY17. The Company's selling, general, and administrative (SG&A) costs were down 2.2% on a y-o-y basis primarily on charges taken for realignment in Q2 FY17. Additionally, the Company's effective tax rate rose to more normalized level of 26.9% in the reported quarter compared to 10.4% in the prior year's same quarter, primarily on issues related to the realignment taken in FY17.

AZZ's net income for Q2 FY18 fell 16.9% to $8.3 million, or $0.32 per diluted share, compared to net income of $10.0 million, or $0.38 per diluted share, for Q2 FY17. The Company's earnings numbers fell short of Wall Street's expectations of $0.41 per share.

Order Update

AZZ's incoming orders were $189.9 million for Q2 FY18 while shipments for the reported quarter totaled $190.4 million, resulting in a book-to-ship ratio of 1.00. In Q2 FY17, the Company's incoming orders were $193.7 million, resulting in a book-to-ship ratio of 0.99.

AZZ's backlog at the end of Q2 FY18 decreased 6.1% to $331.2 million compared to backlog of $352.8 million at the end of Q2 FY17, and was consistent compared to 331.6 million in Q1 FY18. The Company noted that approximately 42% of the backlog is expected to be delivered outside the US compared to 27% in Q2 FY17.

Segment Results

During Q2 FY18, AZZ's revenues from the Metal Coatings segment totaled $99.0 million, an increase of 1.6%, compared to $97.4 million in Q2 FY17. The segment's operating income increased 55.7% to $23.4 million in the reported quarter compared to $15.0 million in the prior period, as result of the $7.3 million in charges taken by the segment in Q2 FY17, resulting in operating margins of 23.6% for the reported quarter versus 15.4% in the prior year's comparable quarter.

During Q2 FY18, AZZ's revenues from the Energy segment came in at $91.4 million, down 6.4% compared to $97.6 million for Q2 FY17. Operating income for the segment fell to $32,000 in the reported quarter compared to $8.2 million in the year-ago corresponding period. Energy division's operating margins for the reported quarter fell to 0.0% compared to 8.4% in the prior year's same period, attributed to product mix from lower revenues and higher operating costs in certain operations.

Cash Matters

During H1 FY18, AZZ's cash flow from operations fell to $2.79 million compared to $50.03 million in the year-ago period. As of August 31, 2017, the Company's cash and cash equivalents totaled $3.55 million compared to $15.91 million as on August 31, 2016.

In a separate press release on October 03, 2017, AZZ announced that its Board of Directors has authorized a quarterly cash dividend of $0.17 per share on the Company's outstanding shares of common stock. The dividend is payable on November 01, 2017, to shareholders of record as of the close of business on October 18, 2017.

Outlook

For FY18, AZZ is forecasting EPS to be in the range of $1.80 to $2.30 per diluted share and annual revenue to be in the band of $825 million to $885 million.

Stock Performance

At the close of trading session on Wednesday, October 11, 2017, AZZ Inc.'s stock price fell slightly by 0.11% to end the day at $46.80. A total volume of 132.68 thousand shares were exchanged during the session, which was above the 3-month average volume of 116.69 thousand shares. The Company's shares are trading at a PE ratio of 23.76 and have a dividend yield of 1.45%. At Wednesday's closing price, the stock's net capitalization stands at $1.24 billion.

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SOURCE: Pro-Trader Daily