Azz 2026 Q1 Earnings Strong Performance as Net Income Surges 331.6%

Azz (AZZ) reported its fiscal 2026 Q1 earnings on July 9, 2025. The company exceeded expectations, showing a remarkable increase in net income and adjusted EPS. Azz raised its fiscal year 2026 guidance, predicting sales between $1.625 billion and $1.725 billion, and adjusted EBITDA ranging from $360 million to $400 million. The company attributes this upward revision to favorable market conditions, reduced interest expenses, and improved operational efficiencies, excluding any potential future acquisitions or regulatory changes.

Revenue
Azz's revenue for 2026 Q1 rose to $421.96 million, reflecting a 2.1% increase from the previous year. The Metal Coatings segment was a key contributor, generating $187.22 million, while Precoat Metals added $234.75 million. Infrastructure Solutions and Corporate segments did not yield revenue this quarter, culminating in the total revenue figure.

Earnings/Net Income
Azz's earnings per share rebounded strongly in 2026 Q1, reaching $5.71, a significant improvement from the previous year's loss of $1.38 per share. Net income surged to $170.91 million, up from $39.60 million in 2025 Q1. This demonstrates robust financial health and operational resilience.

Price Action
The stock price of Azz has edged up 0.98% during the latest trading day, climbed 4.33% during the most recent full trading week, and has increased 7.80% month-to-date.

Post Earnings Price Action Review
Investors deploying a strategy of purchasing AZZ shares following revenue increases in quarterly reports have historically seen substantial gains. Over the past three years, this approach yielded a cumulative return of 160.72%, significantly outperforming the benchmark return of 90.92%. This excess return of 69.80% underscores the strategy’s efficacy in maximizing gains beyond typical market performance. The strategy boasts a healthy compound annual growth rate of 21.33%, indicative of consistent returns. However, investors should be aware of the strategy’s maximum drawdown of -46.65%, which illustrates the potential risks during market downturns. Despite a Sharpe ratio of 0.64, suggesting acceptable risk-adjusted returns, the strategy's high volatility of 33.42% may pose concerns for risk-averse individuals, highlighting the importance of balancing risk and reward.

CEO Commentary
Tom Ferguson, President and CEO of AZZ, expressed enthusiasm for the fiscal year 2026's promising start. He noted a 2.1% increase in sales to $422.0 million and a 21.9% rise in adjusted diluted EPS to $1.78. Consolidated adjusted EBITDA reached $106.4 million, driven by increased hot-dip galvanized steel volumes and productivity. Ferguson highlighted improved margins in Metal Coatings and Precoat Metals, despite slight volume declines in the latter due to market challenges. He remains confident in achieving new profitability records as the company executes strategic plans.

Guidance
The company has revised its fiscal year 2026 guidance, forecasting sales between $1.625 billion and $1.725 billion, adjusted EBITDA from $360 million to $400 million, and adjusted diluted EPS ranging from $5.75 to $6.25. This projection accounts for anticipated market conditions, lower interest expenses, and a 25% annualized effective tax rate, excluding future acquisitions or regulatory changes.

Additional News
Azz Inc. announced the acquisition of Canton Galvanizing, LLC on July 1, 2025, expanding its galvanizing capabilities in the Midwest region. The terms were not disclosed, but the acquisition is expected to be accretive to earnings in its first year. On June 26, 2025, Azz increased its quarterly cash dividend by 17.6%, from $0.17 to $0.20 per share, payable on July 31, 2025. Additionally, Azz resumed its $100 million Share Repurchase Program as of April 28, 2025, demonstrating a commitment to shareholder value through strategic capital deployment.