06:31 AM EDT, 10/10/2024 (MT Newswires) -- AZZ (AZZ) lifted its full-year earnings outlook late Wednesday as the metal and coil coatings company's fiscal second-quarter bottom-line results beat Wall Street estimates while sales fell short of market expectations.

Per-share adjusted earnings are now set to come in between $4.70 and $5.10 for fiscal 2025, according to the company, up from its previous projections of $4.50 to $5. AZZ continues to forecast sales of $1.53 billion to $1.63 billion. The current consensus on Capital IQ is for normalized EPS of $4.93 and revenue of $1.61 billion.

The company's adjusted EPS rose 7.9% on a yearly basis to $1.37 for the three-month period ended August, topping the Street's view for $1.31. Sales increased to $409 million from $398.5 million in the prior-year quarter, but fell short of six Capital IQ-polled analysts' estimate of nearly $412 million. The stock was down 1.9% in Thursday's premarket activity.

Sales in the metal coatings segment ticked up 1% to $171.5 million, buoyed by "slightly increased" volume that was supported by infrastructure spending, the company said. The precoat metals business advanced 3.8% to $237.5 million amid higher volume, driven by growth in end markets including construction, heating, ventilation and air conditioning and transportation.

"Consolidated adjusted (earnings before interest, taxes, depreciation and amortization) margin grew to 22.5%, primarily driven by higher volume for hot-dip galvanized steel and coil-coated materials and operational productivity over the prior year," Chief Executive Tom Ferguson said in a statement.

Selling, general and administrative expenses fell to $35.9 million from $36.2 million last year.

AZZ's fiscal year-to-date cash from operations of $119.4 million allowed it to reduce its debt by $45 million by the end of the second quarter, according to Ferguson. "We are on pace to exceed our previously stated target debt reduction range of $60 (million) to $90 million, and now expect debt reduction of at least $100 million in the fiscal year," the CEO said.

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