AZZ Inc. (NYSE:AZZ), a key player in the Manufacturing - Electronics industry, specializing in hot-dip galvanizing and coil coating solutions, has demonstrated strong financial performance in its recent earnings report. The company's earnings per share (EPS) for the first quarter of fiscal year 2026 reached $1.78, surpassing the estimated $1.58. This marks a significant improvement from the $1.46 per share reported in the same quarter last year.
The company's revenue for the quarter was approximately $422 million, slightly below the estimated $436 million. Despite this, AZZ achieved a 2.1% increase in sales compared to the previous year. The Metal Coatings segment saw a 6% rise in sales to $187.2 million, while Precoat Metals experienced a slight decrease of 0.8% to $234.7 million. This revenue performance, although below expectations, still reflects growth in key areas.
AZZ's financial health is further highlighted by its adjusted EBITDA of $106.4 million, representing 25.2% of sales, up from 22.8% in the previous year. The Metal Coatings segment achieved an impressive adjusted EBITDA margin of 32.9%, while Precoat Metals recorded a margin of 20.7%. The company also reduced its debt by $285 million, resulting in a net leverage ratio of 1.7x, indicating a strong balance sheet.
The company's valuation metrics provide additional insights into its market position. AZZ has a price-to-earnings (P/E) ratio of approximately 23.42, suggesting that investors are willing to pay a premium for its earnings. The price-to-sales ratio stands at about 1.92, indicating that the market values the company at nearly twice its annual sales. Additionally, the enterprise value to sales ratio is approximately 2.47, reflecting the company's total valuation relative to its sales.
AZZ's liquidity and financial stability are underscored by a current ratio of approximately 1.70, indicating a good level of liquidity to cover short-term liabilities. The debt-to-equity ratio is about 0.84, suggesting a moderate level of debt financing compared to equity. These metrics, combined with a cash dividend of $0.17 per share paid to common shareholders, highlight AZZ's commitment to maintaining financial health and rewarding its investors.
