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Electrical equipment manufacturer AZZ Incorporated (AZZ - Snapshot Report) posted earnings per share of 60 cents in the third quarter of fiscal 2013, a penny short of the Zacks Consensus Estimate.

However, the quarterly results were 53.8% higher than 39 cents reported in the year-ago comparable period. The higher year-over-year contribution from Electrical and Industrial Products and Galvanizing Service segments benefited the results.

Total Revenue

Total revenue shot up 28.5% year over year to $149.7 million from $119.5 million. Better performance from its organic assets and contribution from its acquired assets resulted in the better year-over-year results.

Revenues, however, missed the Zacks Consensus Estimate of $160 million.

Fiscal Third Quarter Highlights

Cost of sales, as a percentage of revenue, contracted 362 basis points year over year to aid margin. Operating income grew 37.4% to $33.4 million.

The backlog of the company at the end of the quarter was $215.8 million, up substantially from $132.1 million reported a year ago. AZZ Incorporated benefited from the acquired backlog of Nuclear Logistics Incorporated, which came under its umbrella in June 2012.

The order booking of $152.4 million was also higher than $125.4 million booked in the comparable prior-year period. Overseas orders constituted 29% of the backlog, which is an encouraging sign for the company.

Interest expenses dropped to $3.2 million from $3.5 million, indicating a reduction in the debt level of the company.

Guidance for Fiscal 2013

The company also adjusted its earnings per share expectation for the fiscal. It now expects earnings in the range of $2.35 to $2.45 per share, up from the prior range of $2.25 to $2.40.

The guidance provided by the company takes into consideration the two-for-one stock split, effective July 2012, and contribution from its acquired assets.

At the Peer

Another operator in the electrical equipment market, Eaton Corporation (ETN - Analyst Report) is expected to release its fourth-quarter 2012 earnings on January 21, 2013.The Zacks Consensus earnings estimates for the fourth quarter and full year 2012 are 95 cents and $4.09, respectively. Eaton currently has a short-term Zacks Rank #3 (Hold).

Our Take

Even though the company failed to match our estimates, we believe that the strong backlog will definitely help the company post better results in the forthcoming quarters. Besides, the three strategic acquisitions made by the company during the first nine months of the fiscal year will also help the company to report better results in the forthcoming quarters.

Headquartered in Forts Worth, Texas, AZZ Incorporated was founded in 1956. The company is a manufacturer and seller of electrical equipment and components required for power generation, transmission and distribution. The company, with a market capitalization of $1.01 billion, primarily caters to industrial customers in the United States and Canada and has 2,154 full time employees. The company currently retains a Zacks Rank #3 (Hold).

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