Electrical equipment manufacturer
) posted second quarter fiscal 2014 pro forma earnings of 57
cents per share, missing the Zacks Consensus Estimate as well as
the year-ago figure by 8 cents.
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On a GAAP basis, the company's earnings were 64 cents versus 62
cents a year ago. The difference between GAAP and pro forma
earnings was primarily due to the combined effect of a loss
associated with the fire at AZZ Inc.'s Joliet facility, charges
for acquisitions, and gains from the disruption of businesses and
property insurance proceeds related to the fire.
AZZ Inc.'s second-quarter revenues were $189.8 million, missing
the Zacks Consensus Estimate by $13.2 million.
However, quarterly revenues increased 24% year over year
primarily due to a 56.5% year-over-year rise at the
Electrical and Industrial Products
segment on the back of synergies from the acquisitions of Nuclear
Logistics Inc. and WSI. The positive results were partially
offset by a 1.5% year-over-year decline at the company's
Cost of sales was $133.9 million, up 21.6% from the year-ago
level of $110.1 million.
Total operating income grew 12.1% year over year to $37 million
primarily due to higher contribution from the Electrical and
Industrial Products and Galvanizing Services segments.
At the end of the quarter, the backlog at AZZ Inc.'s Electrical
and Industrial Products segment was $211.4 million, compared with
$213.1 million a year ago.
In the quarter, incoming orders were $180.7 million, up 19% from
the year-ago level of $151.8 million. Overseas orders constituted
35% of the backlog.
Interest expenses increased to $4.7 million from $3.2 million,
indicating an increase in the debt level.
Cash and cash equivalents as of Aug 31, 2013 were $42 million
versus $68.7 million as of Aug 31, 2012.
Net cash provided by operating activities during the first six
months of fiscal 2014 was $55.2 million compared with $30.1
million in the prior-year comparable period.
As of Aug 31, 2013, the company's long-term debt due after one
year was $434.5 million versus $196.4 million as of Feb 28, 2013.
During the earnings call, the Board of Directors announced that
AZZ Inc. will pay a quarterly cash dividend of 14 cents per share
on the company's common stock outstanding. The dividend will be
paid on Oct 25, 2013 to shareholders of record as of Oct 11,
AZZ Inc. provided its earnings and revenues guidance for
third-quarter fiscal 2014. Earnings and revenues are expected to
be in the range of 65 cents to 75 cents per diluted share and
$210 million to $230 million, respectively.
AZZ Inc. decreased its fiscal 2014 earnings guidance to the range
of $2.45 - $2.65 per diluted share from the previous expectation
of $2.65 - $2.95 per diluted share. In addition, the company
lowered its revenue guidance for fiscal 2014 to $780 - $810
million from the earlier projection of $825 - $900 million.
The downward revision in fiscal 2014 guidance was primarily due
to the delay in the development of new domestic and international
nuclear power projects and delay in the commencement of a project
in the Gulf Coast.
Other Company Release
Mistras Group Inc.
) reported fourth quarter fiscal 2013 earnings of 16 cents per
share, missing the Zacks Consensus Estimate by a penny and the
year-ago figure by 36%.
We believe strong order booking will help AZZ Inc. to report
better results in the forthcoming quarters. A steady flow of
international orders, primarily from the Middle East and China
for higher power generation, will offset the delay in completion
of four important projects and weak domestic demand. In addition,
strategic acquisitions will provide synergies to AZZ Inc.'s
performance going forward.
AZZ Inc. currently has a Zacks Rank #3 (Hold). However, other
stocks from the industry that are worth considering include
) with a Zacks Rank #1 (Strong Buy), and
Franklin Electric Co., Inc.
) with a Zacks Rank #2 (Buy).