AZZ Inc (NYSE:AZZ) stock rose 8.18% (As on January 10, 11:11:16 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 23. Metal Coatings Segment posted strong sales of $158.3 million, up 17.2% from the third quarter of the prior year. Improved sales were driven by value pricing initiatives, the impact of fully integrated prior acquisitions, and an increase in volume for hot-dip galvanizing driven by continued strength within the renewables, utility, OEM, and non-residential construction markets. Precoat Metals Segment posted strong sales of $215.0 million, primarily driven by value pricing initiatives and stable volumes from non-residential construction markets and mix. The Company generated year-to-date operating cash flow of $68.6 million through strong earnings and effective management of working capital. A total of $230.3 million of operating cash and proceeds from the sale of AIS were used to pay down debt in the period. At the end of the third quarter, net leverage was 3.4x LTM EBITDA, which improved approximately 0.9x in the six months since closing the Precoat Metals acquisition. Consistent with the capital allocation strategy, the Company returned cash to shareholders through cash dividend payments. Capital expenditures were $18.3 million during the quarter.

AZZ in the third quarter of FY 23 has reported the adjusted earnings per share of 88 cents, beating the analysts’ estimates for the adjusted earnings per share of 84 cents. The company had reported the adjusted revenue of $373.3 million in the third quarter of FY 23, beating the analysts’ estimates for revenue of $369.59 million.

AZZ, Inc. expects FY2023 EPS to be in the range of $4.05-$4.25, versus the consensus of $3.81. This is up from previously issued guidance of $3.80 – $4.00. The company is reaffirming the annual sales guidance range of $1.27 billion to $1.32 billion.

Meanwhile, on September 30, 2022, the Company completed the transaction whereby AZZ contributed its AZZ Infrastructure Solutions segment to AIS Investment Holdings LLC (the “AIS JV”) and sold a 60% interest in the AIS JV to Fernweh Group. The Company received proceeds from the sale of approximately $108.0 million, as well as $120.0 million that was funded by committed debt financing taken on by the AIS JV, for total cash received of $228 million. Full year guidance reflects the previously communicated seasonally lower fourth quarter, additional interest expense, dividends on the Preferred Stock, and the impact of a normalized forward-looking tax rate.