) delivered strong first-quarter fiscal 2013 results on the back of
a better-than-expected performance at its Galvanizing Service
segment. With a sizable order backlog and an expected long-term
earnings growth rate of 15.9%, this Zacks #1 Rank (Strong Buy)
electrical equipment manufacturer offers an attractive investment
opportunity for growth-seeking investors.
Strong Start to Fiscal 2013
On June 28, the company reported first quarter fiscal 2013
operating earnings per share of 48 cents (stock split adjusted),
ahead of the Zacks Consensus Estimate by 17.1% and better than last
year's earnings of 38 cents.
Total revenue shot up 11.4% year over year to $127.1 million, while
operating margin remained flat at 15%. Cost of sales, as a
percentage of revenue, contracted 276 basis points year over year
to aid margin.
The company's backlog increased 18.6% from last year to $136.1
million. It received new orders worth $124.6 million in the
AZZ Incorporated expects fiscal 2013 earnings per share (after
stock split) between $2.05 and $2.15, reflecting a year-over-year
increase of 32% to 39%. Revenue is expected between $550 million
and $575 million, reflecting an advancement of 17% to 23% over the
Earnings Estimate Revisions
The Zacks Consensus Estimates for fiscal 2013 and 2014 increased
1.5% and 3.0% to $2.06 and $2.41, respectively, in the last 30
days. The consensus estimate for fiscal 2013 is near the lower end
of the company's guidance range.
The past 30 days have seen one of three estimates rise for fiscal
2013, and one of our estimates advance for fiscal 2014.
Shares of AZZ Incorporated are roughly trading 15 times the fiscal
2013 estimate with the PEG ratio at 0.92 times. The price-to-free
cash flow is at 15.1, an 8.8% discount to the peer group average of
16.6%. The company has a trailing 12-month ROE of 14.9%,
substantially higher than the peer group average of 8.8%.
Ever since the latest earnings release on June 28, the stock price
has grown 21.6%.
Headquartered in Fort Worth, Texas, AZZ Incorprated was founded in
1956. The company is a manufacturer and seller of electrical
equipment and components required for power generation,
transmission and distribution. With a market capitalization of
$0.78 billion, the company primarily caters to industrial customers
in the United States and Canada. As of February 29, 2012, the
company operated 34 hot dip-galvanizing facilities in the United
States. The company has 2,154 full time employees and competes with
Eaton Corporation (
) in the electrical equipment market niche.
AZZ INC (AZZ): Free Stock Analysis Report
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