AZZ Q3 Earnings Surpass Estimate, Revenues Increase Y/Y

Core Insights - AZZ Inc. reported third-quarter fiscal 2025 earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $1.29, with a year-over-year increase of 16.8% [1] - Total revenues reached $403.7 million, surpassing the consensus estimate of $400 million, and reflecting a 5.8% year-over-year growth driven by market share growth and improvements in end markets such as construction, HVAC, and transportation [1] Segmental Results - The company operates two reportable segments: Metal Coatings and Precoat Metals - Revenues from the Metal Coatings segment, which accounted for 41.8% of total revenues, were $168.6 million, a 3.3% increase year over year, slightly below the consensus estimate of $169 million [3] - Revenues from the Precoat Metals segment, representing 58.2% of total revenues, totaled $235.1 million, up 7.6% year over year, matching the consensus estimate of $235 million [3] Margin Profile - Cost of sales increased by 4.2% year over year to $305.9 million, while gross profit rose by 10.9% to $97.8 million - The adjusted gross margin improved to 24.2% from 23.1% in the previous year [4] - Selling, general, and administrative expenses increased by 11.1% year over year to $35.3 million, and adjusted EBITDA grew by 5% to $90.7 million [4] Balance Sheet and Cash Flow - At the end of the fiscal third quarter, AZZ had a cash balance of $1.5 million, down from $4.3 million at the end of fiscal 2024, with long-term debt at $879.5 million [5] - In the first nine months of fiscal 2025, the company generated net cash of $185.6 million from operating activities, compared to $180.9 million in the same period last year [5] - Capital expenditures for property, plant, and equipment were $85.9 million, reflecting a 28.5% year-over-year increase [5]