AZZ Inc. reports $15.4 million in net income for fiscal Q3

Tuesday, 08 January 2019 01:05:06 (GMT+3)   |   San Diego
       

AZZ Inc., a Fort Worth, Texas-based global provider of metal coatings services, welding solutions, specialty electrical equipment and highly engineered services, today announced financial results for the three months ended November 30, 2018.

Revenues for the third quarter of fiscal year 2019 were $239.5 million compared to $208.2 million for the same quarter last year, an increase of 15.1 percent. Net income for the third quarter increased to $15.4 million, compared to a net loss of $(0.2) million for the third quarter of fiscal year 2018.

Incoming orders for the quarter were $211.3 million resulting in a book to revenue ratio of 0.88.  In the third quarter of fiscal year 2018 incoming orders were $179.8 million, resulting in a book to revenue ratio of 0.86.

Revenues for the Energy segment for the third quarter of fiscal year 2019 were $132.0 million as compared to $107.0 million for the same quarter last year, an increase of 23.4 percent. Gross profit rose 368.4 percent to $28.1 million compared to $6.0 million for the same period last year, with gross margins of 21.3 percent for the third quarter of fiscal year 2019 compared to 5.6 percent in the prior year. 

Revenues for the Metal Coatings segment for the third quarter of fiscal year 2019 were $107.5 million, compared to the $101.1 million for the same period of last year, an increase of 6.3 percent. Gross profit fell 13.7 percent to $21.7 million from $25.1 million in the same quarter last year, driving gross margins of 20.2 percent compared to 24.8 percent in the same quarter last year. 

Tom Ferguson, president and chief executive officer of AZZ Inc., commented, "We are pleased to have achieved significant year-over-year growth for both top- and bottom-lines in the third quarter of fiscal year 2019. Driven by strength in our Energy segment, third quarter consolidated revenue increased 15.1 percent to $239.5 million and net income increased to $15.4 million this year compared to a loss of $0.2 million in the third quarter last year.  Market demand has improved, particularly in our industrial sector as turnarounds and outages returned to more normal levels."    

"Metal Coatings segment revenue increased 6.3 percent from the third quarter of last year.  Operating margins were 17.0 percent, compared to 21.4 percent in the third quarter of fiscal 2018, driven by near-peak zinc costs flowing through our kettles, higher labor costs year-over-year, and our Alternate Coatings and Continuous Galvanized Rebar businesses performing below expectations.  Our push on price increases was unable to offset these cost issues," Ferguson stated. "As we noted last quarter, we believe zinc costs should begin to recede by the fourth quarter of the year, and we have taken the necessary steps to close two underperforming galvanizing plants during the year.  Although zinc costs, sequentially, were down slightly from the second quarter, we expect a steeper reduction in the fourth quarter."

Ferguson concluded, "We remain somewhat cautious due to the uncertainty related to tariffs and the Chinese trade situation, as well as the tighter market for labor in many of our US locations.  Looking forward, we are comfortable narrowing our fiscal 2019 guidance with earnings per share in the range of $1.95 to $2.20 per diluted share, from $1.90 to $2.25 per diluted share, and annual sales in the range of $940 million to $960 million, from $930 million to $970 million."


Tags: US North America 

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