AZZ Inc. (AZZ) has reported a 37.14 percent plunge in profit for the quarter ended May 31, 2017. The company has earned $13.24 million, or $0.51 a share in the quarter, compared with $21.06 million, or $0.81 a share for the same period last year. Revenue during the quarter dropped 14.06 percent to $208.55 million from $242.67 million in the previous year period. Gross margin for the quarter contracted 247 basis points over the previous year period to 23.62 percent. Total expenses were 89.50 percent of quarterly revenues, up from 85.78 percent for the same period last year. That has resulted in a contraction of 372 basis points in operating margin to 10.50 percent.
Operating income for the quarter was $21.91 million, compared with $34.51 million in the previous year period.
Tom Ferguson, president and chief executive officer of AZZ Inc., commented, "First quarter financial performance reflected continued delays and smaller than expected scopes in refinery turnarounds and maintenance projects in our Energy segment. We experienced some margin pressure in our Electrical platform as we continued to feel the effects of soft markets in oil and gas sector and the uncertainty and delays related to the Westinghouse nuclear projects. We did, however, see improving performance in some of the other markets served by our Energy segment. Overall on a sequential basis, we had improved top and bottom line financial performance with 7.6% and 14.3% growth, respectively, compared to the fourth quarter of fiscal year 2017."
For financial year 2018, AZZ Inc. expects revenue to be in the range of $880 million to $950 million. It projects diluted earnings per share to be in the range of $2.60 to $3.10 for the same period.
Operating cash flow turns negative
AZZ Inc. has spent $15.80 million cash to meet operating activities during the quarter as against cash inflow of $9.87 million in the last year period. The company has spent $9.97 million cash to meet investing activities during the quarter as against cash outgo of $33.06 million in the last year period.
Cash flow from financing activities was $20.89 million for the quarter as against cash outgo of $5.05 million in the last year period.
Cash and cash equivalents stood at $6.34 million as on May 31, 2017, down 47.52 percent or $5.74 million from $12.08 million on May 31, 2016.
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