AZZ’s first quarter was marked by revenue falling below Wall Street expectations, a decline management mainly attributed to unusually severe winter weather that caused over 200 lost production days. Both the Metal Coatings and Precoat Metals segments saw lower volumes as a result. Despite these disruptions, operational improvements helped the company sustain gross margins. CEO Tom Ferguson explained, “We’re looking for a very strong first quarter on the Metal Coatings side, and they’re out of the gate really, really well,” as the company quickly worked to recover lost production in March and April.
Is now the time to buy AZZ? Find out in our full research report (it’s free).
AZZ (AZZ) Q1 CY2025 Highlights:
- Revenue: $351.9 million vs analyst estimates of $367.8 million (4% year-on-year decline, 4.3% miss)
- Adjusted EPS: $0.98 vs analyst estimates of $0.98 (in line)
- Adjusted EBITDA: $71.18 million vs analyst estimates of $73.34 million (20.2% margin, 2.9% miss)
- Adjusted EPS guidance for the upcoming financial year 2026 is $5.80 at the midpoint, missing analyst estimates by 0.7%
- EBITDA guidance for the upcoming financial year 2026 is $380 million at the midpoint, above analyst estimates of $369.1 million
- Operating Margin: 13.5%, down from 14.6% in the same quarter last year
- Market Capitalization: $2.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions AZZ’s Q1 Earnings Call
- Adam Thalhimer (Thompson, Davis) asked about post-weather recovery and whether lost production would lead to a rebound. CEO Tom Ferguson said, "We've recovered the shortfall...for Metal Coatings and probably exceeded that," noting strong starts in March and April.
- John Franzreb (Sidoti & Company) questioned the ongoing impact of tariffs on zinc. David Nark, Chief Marketing Communications and Investor Relations Officer, explained that zinc is exempt from tariffs and current supplies are unaffected, with most sourced from North America.
- Mark Reichman (NOBLE Capital Markets) inquired about capital allocation of proceeds from the joint venture sale. CFO Jason Crawford said decisions between further debt repayment, M&A, and buybacks are pending, but paying down more than $165 million in debt is realistic.
- Ghansham Panjabi (Baird) asked if tariff uncertainty or macro risks changed management’s outlook. Ferguson noted a strong Q1 start and incremental M&A contributions, while Crawford confirmed typical seasonality and expected margin lift as new facilities ramp.
- Timna Tanners (Wolfe Research) probed for tariff-driven project delays or material shortages. Ferguson and Crawford said customer sentiment has improved and no significant material shortages are expected, with minor cost impacts being managed via pricing.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will closely monitor (1) the pace and profitability of the Washington, Missouri coil coating facility ramp, (2) progress on announced and pending bolt-on acquisitions—particularly in Metal Coatings, and (3) the sustainability of margin improvements as AZZ pushes through price increases and continues operational efficiency efforts. Shifts in infrastructure spending and tariff impacts will also be important factors to track.
AZZ currently trades at $89.47, up from $77.71 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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