Electrical equipment manufacturer
) reported third-quarter fiscal 2014 adjusted earnings of 59
cents per share, missing the Zacks Consensus Estimate by 16.9%.
The earnings decreased by 7.8% from the year-ago level primarily
due to higher cost of sales and selling, general and
administrative expenses, and an increase in share counts.
On a GAAP basis, the company's earnings per share were 72 cents
versus 60 cents in the prior-year quarter. The difference between
GAAP and adjusted earnings was primarily due to the combined
effect of a loss associated with the fire at AZZ Inc.'s Joliet
facility, charges from acquisitions and gain from the property
insurance proceeds related to the fire.
In third-quarter fiscal 2014, AZZ Inc.'s revenues were $197.8
million, lagging the Zacks Consensus Estimate by 8.8%.
However, quarterly revenues climbed 32.1% year over year
primarily due to a rise of 85.4% year over year at the
Electrical and Industrial Products
segment on the back of synergies from the acquisitions of Nuclear
Logistics Inc. and AZZ WSI LLC. These positives were partially
offset by a 4% year-over-year decline at the company's
segment primarily due to non-operating expenses resulting from
the fire at the Joliet galvanizing facility.
In the quarter under review, cost of sales was $144.4 million, up
37.9% from the prior-year level of $104.7 million.
The company's total costs and expenses were $169.8 million, up
35.3% from the year-ago level of $125.5 million, primarily due to
higher selling, general and administrative expenses and an
increase in interest expenses.
The increase in revenues was more than offset by higher total
operating expenses, thereby bringing down the operating margin to
16.8% from the prior-year level of 22.3%.
At the end of the quarter, AZZ Inc.'s product backlog edged down
1.9% to $211.8 million from the year-ago level of $215.8 million.
In the quarter, incoming orders were $198.2 million, up 30.1%
from the year-ago level of $152.4 million. The company's book to
ship ratio was 100%. Overseas orders constituted 24.6% of the
Interest expenses increased 43.8% year over year to $4.6 million
due to utilization of credit facility to finance the Aquilex SRO
Cash and cash equivalents as of Nov 30, 2013 were $50.9 million
versus $49.5 million as of Nov 30, 2012.
Net cash provided by operating activities during the first nine
months of fiscal 2014 was $94.6 million compared with $66.6
million in the prior-year comparable period.
As of Nov 30, 2013, the company's long-term debt due after one
year was $416.6 million versus $196.4 million as of Nov 30, 2012.
Considering the impact of the AZZ WSI LLC acquisition, AZZ Inc.
revised its earnings and revenue guidance for fiscal 2014. The
company lowered its earnings guidance to the range of $2.30 -
$2.40 per share from the previous estimate of $2.45 - $2.65 per
share. In addition, the company decreased its revenue guidance to
$760 - $770 million from the earlier projection of $780 - $810
Other Company Release
) is slated to release its third-quarter of fiscal 2014 earnings
on Feb 5, 2014. The Zacks Consensus Estimate is $1.03.
Regal Beloit Corp.
) is slated to release its fourth-quarter 2013 earnings on Feb
10, 2014. The company expects fourth-quarter adjusted earnings to
be in the range of 82 - 90 cents per share. The Zacks Consensus
Estimate is 84 cents.
AZZ Inc. currently has a Zacks Rank #3 (Hold). However, a
better-ranked stock in the same sector is
Pioneer Power Solutions, Inc.
) with a Zacks Rank #1 (Strong Buy).
AZZ INC (AZZ): Free Stock Analysis Report
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PIONEER PWR SOL (PPSI): Get Free Report
REGAL BELOIT (RBC): Free Stock Analysis
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