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AZZ Q3 Earnings & Revenues Miss Estimates, Bookings Up Y/Y

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AZZ Incorporated (AZZ - Free Report) reported earnings per share (EPS) of 59 cents in third-quarter fiscal 2019 (ended Nov 30, 2018), which lagged the Zacks Consensus Estimate of 61 cents by 3.3%. Nevertheless, the bottom line improved significantly from the year-ago quarter’s loss of a penny.

Total Revenues

In the quarter under review, the company delivered revenues of $239.5 million, which fell short of the Zacks Consensus Estimate of $242 million by 1%.

Driven by strength in the company’s Energy segment, the top line increased 15.1% from $208.2 million registered in the prior-year quarter. Revenues at the Energy and Metal Coatings segments increased a respective 23.4% and 6.3% on a year-over-year basis.

AZZ Inc. Price, Consensus and EPS Surprise

AZZ Inc. Price, Consensus and EPS Surprise | AZZ Inc. Quote

Backlogs & Booking

Bookings in third-quarter fiscal 2019 were up 17.5% year over year to $211.3 million, while the book-to-revenue ratio was at 0.88.

At the end of third-quarter fiscal 2019, the company’s total backlog was $307.8 million, up 8.7% from $283.2 million in the year-ago quarter. Of the existing backlog, 54% will be delivered outside the United States.

Quarterly Highlights

Total operating income in the quarter increased massively to $22.8 million from the year-ago quarter’s figure of $1.6 million.

Selling, general and administrative expenses came in at $27 million, down 8.7% from $30 million in the prior-year quarter.

Interest expenses increased 6% to $3.7 million from $3.5 million in the prior-year quarter.

Financial Highlights

Cash and cash equivalents as of Nov 30, 2018, amounted to $17.4 million compared with $10.7 million as of Feb 28, 2018.

Long-term debt (net) was $272.7 million as of Nov 30, 2018, compared with $286.6 million as of Feb 28, 2018.

Net cash provided by continuing operations activities at the end of nine six months of 2018 was $60.4 million, up from $38.7 million at the end of the first nine months of 2017.

Guidance

AZZ narrowed its fiscal 2019 EPS guidance to the range of $1.95-$2.20 from the prior range of $1.90-$2.25. Also, it narrowed its sales guidance to the range of $940-$960 million from the previous range of $930-$970 million.

Zacks Rank & Stock to Consider

AZZ currently carries a Zacks Rank #5 (Strong Sell).

A better-ranked stock in the same space is Enersys (ENS - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enersys has an estimated long-term earnings growth rate of 10%. The company has an average four-quarter positive earnings surprise of 2.8%.

Upcoming Manufacturing Electronics Releases

Eaton Corp. (ETN - Free Report) is expected to release fourth-quarter 2018 results on Jan 31, 2019. The company has an estimated long-term earnings growth rate of 10%.

A. O. Smith Corp. (AOS - Free Report) is expected to release fourth-quarter 2018 results on Jan 29. The company has an estimated long-term earnings growth rate of 11.3%.

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