LONDON, UK / ACCESSWIRE / July 14, 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 release of its first quarter fiscal 2018 earnings results on July 06, 2017. The electrical equipment maker's revenue and earnings came in below market expectations. 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 May 31, 2017, AZZ reported revenues of $208.6 million, down 14.1% compared to revenue of $242.7 million for Q1 FY17. The Company's revenue numbers lagged behind analysts' expectations of $217 million.

AZZ's gross margins for Q1 FY18 were 23.6% compared to 26.1% in Q1 FY17. The Company's SG&A costs were down 5.1% on a y-o-y basis. Additionally, AZZ's effective tax rate decreased to 29.3% in the reported quarter compared to 31.6% in the prior year's corresponding quarter.

During Q1 FY18, AZZ's incoming orders totaled $193.8 million while shipments totaled $208.6 million, resulting in a book to ship ratio of 0.93. In Q1 FY17, the Company's incoming orders were $250.5 million, resulting in a book to ship ratio of 1.03.

AZZ's backlog at the end of Q1 FY18 decreased 6.4% to $331.6 million compared to $354.2 million for Q1 FY17. The Company stated that approximately 41% of the current backlog is expected to be delivered outside the US compared to 25% in the year-ago comparable quarter.

For Q1 FY18, AZZ's net income fell 37.1% to $13.2 million, or $0.51 per diluted share, compared to net income of $21.1 million, or $0.81 per diluted share, for Q1 FY17. The Company's earnings numbers lagged behind Wall Street's expectations.

Tom Ferguson, AZZ Inc.'s President and Chief Executive Officer, commented:

"First quarter financial performance reflected continued delays and smaller than expected scopes in refinery turnarounds and maintenance projects in our Energy segment. We experienced some margin pressure in our Electrical platform as we continued to feel the effects of soft markets in oil and gas sector and the uncertainty and delays related to the Westinghouse nuclear projects. We did, however, see improving performance in some of the other markets served by our Energy segment."

Mr. Ferguson concluded:

"Despite the current market conditions, we are cautiously optimistic that the fiscal year 2018 will benefit from improved infrastructure project spending during the second half of the year."

Segment Details

During Q1 FY18, AZZ's Energy segment's revenues totaled $116.5 million compared to $138.1 million for Q1 FY17, reflecting a decrease of 15.7%. Operating income for the Energy segment decreased 54.2% to $8.6 million in the reported quarter compared to $18.8 million for the year earlier quarter. Energy segment's operating margins for Q1 FY18 dropped to 7.4% compared to 13.6% in the prior year period primarily as a result of lower gross margins from an unfavorable shift in revenue mix from higher margin business to lower margin business.

AZZ's Metal Coatings segment reported revenue of $92.1 million in Q1 FY18 compared to the $104.6 million for Q1 FY17, representing a drop of 11.9%. The division's operating income was $21.2 million in the reported quarter compared to $24.3 million in the prior year's same period. As a result, Metal Coatings segment's operating margins for Q1 FY18 decreased slightly to 23.1% compared to 23.2% in Q1 FY17.

Outlook

AZZ reaffirmed its previously issued fiscal 2018 guidance of earnings per share in the range of $2.60 to $3.10 per diluted share and annual sales in the range of $880 million to $950 million.

Stock Performance

At the close of trading session on Thursday, July 13, 2017, AZZ Inc.'s stock price rose 3.79% to end the day at $50.70. A total volume of 209.65 thousand shares was exchanged during the session, which was above the 3-month average volume of 108.28 thousand shares. The Company's shares are trading at a PE ratio of 21.71 and have a dividend yield of 1.34%. At Thursday's closing price, the stock's net capitalization stands at $1.42 billion.

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