AZZ stock hits record high on Q1 results, upbeat outlook

Shares of AZZ (NYSE:AZZ) surged as much as 13% to a record high Thursday after the company reported fiscal first-quarter earnings that beat estimates and raised its full-year guidance, citing solid operational performance and improved market conditions.

The provider of metal coatings and coil processing solutions said its net income soared to $170.9 million, a 332% increase, boosted by a $273.2 million distribution tied to AZZ’s (NYSE:AZZ) minority stake in AVAIL and its sale of the Electrical Products Group.

Excluding that one-time gain, adjusted net income rose 22.3% to $53.8 million, or $1.78 a share, nearly 22% higher than the same period last year. Wall Street analysts on average had expected $1.59 a share.

Sales rose 2.1% to $422 million in sales for the quarter ended May 31, missing the consensus estimate of about $436 million.

Adjusted earnings before interest taxes, depreciation and amortization grew to $106.4 million, representing 25.2% of total sales.

Chief Executive Tom Ferguson credited the strong start to fiscal 2026 to volume growth in the company’s core hot-dip galvanizing business and improved productivity.

“We are on track to set new profitability records in fiscal year 2026 as we continue to execute on our strategic plans, he said in a statement, highlighting operational gains in both the Metal Coatings and Precoat Metals segments.

Sales in the Metal Coatings segment rose 6% to $187.2 million, with an ebitda margin of 32.9%, bolstered by higher infrastructure-related demand and better zinc utilization. Precoat Metals sales dipped slightly to $234.7 million due to softness in construction and appliance markets, though margins improved to 20.7%.

AZZ (AZZ) also used its cash flow, totaling $314.8 million for the quarter, to pay down $285 million in debt, reducing its net leverage ratio to 1.7 times. Capital spending totaled $20.9 million, with full-year investments expected to range between $60 million and $80 million.

The company raised its full-year outlook, now projecting sales between $1.625 billion and $1.725 billion and adjusted EPS between $5.75 and $6.25. AZZ also recently increased its quarterly dividend from $0.17 to $0.20 per share and completed a bolt-on acquisition in its Metal Coatings business.