Friday, electrical products maker and galvanizing services provider AZZ inc. (AZZ) reported a marginal decline in second-quarter profit, reflecting a 7.8% drop in net sales. Earnings on a per share basis exceeded analysts' expectations. In addition, the company raised its earnings and revenue forecast for fiscal 2010.
The Fort Worth, Texas-based company's net income for the quarter marginally declined to $11.12 million or $0.89 per share from $11.30 million or $0.92 per share in the previous year. On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter dropped 7.8% to $95.16 million from $103.26 million a year ago. Street analysts anticipated revenues of $94.53 million for the quarter. Revenues from Electrical and Industrial Products segment increased 7% to $55.57 million from $51.96 million in the earlier year. Galvanizing Services segment revenues were $39.59 million, down 23% from $51.3 million in the preceding year, due to lower demand.
Backlog at the end of the second quarter was $139.4 million, compared to $190.8 million in the prior-year period.
David Dingus, president and chief executive officer commented, "We anticipate the slow and selective release of orders continuing into our third quarter. While it is difficult to forecast timing of order releases in current market conditions, we would anticipate that it will be the first quarter of our fiscal 2011 before we start seeing a rebuilding of our backlog. Our international quotations are strong and we did secure two significant international orders in the second quarter."
For the six-month period, the company's net income was $21.02 million or $1.69 per share, compared to net income of $21.43 million or $1.74 per share in the same period last year. Half-yearly revenues declined 6.2% to $190.65 million from $203.22 million in the previous year.
In addition, AZZ raised its fiscal 2010 earnings outlook to a range of $3 - $3.10 per share from the prior range of $2.70 - $2.90 per share.
For fiscal 2010, the company now expects revenues to be within the range of $370 million - $380 million, compared to $370 million - $390 million range projected earlier. Analysts currently expect the company to report earnings of $2.83 per share on revenues of $380.65 million for fiscal 2010.
AZZ closed Thursday's regular trading at $35.95 on the NYSE.
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