AZZ Inc (NYSE:AZZ), a leading provider of hot-dip galvanizing and coil coating solutions, stock rallies 9.28% (As on July 10, 11:10:36 AM UTC-4, Source: Google Finance) after the company reported first-quarter earnings that exceeded analyst expectations, while revenue fell slightly short of estimates. Metal Coatings, one of the company’s two main segments, saw sales increase 6% to $187.2 million, driven by higher volumes from infrastructure-related project spending. Metal Coatings benefited from improved zinc utilization and delivered an Adjusted EBITDA margin of 32.9%. Meanwhile, Precoat Metals sales decreased slightly by 0.8% to $234.7 million due to lower volumes in construction, HVAC, and appliance markets. Precoat Metals’ Adjusted EBITDA margin improved to 20.7%. The company significantly strengthened its balance sheet during the quarter, receiving $273.2 million from its minority interest in AVAIL related to the sale of the Electrical Products Group.

AZZ in the first quarter of FY26 has reported the adjusted earnings per share of $1.78, beating the analysts’ estimates for the adjusted earnings per share of $1.56. The company had reported the adjusted revenue growth of 2.1 percent to $422 million in the first quarter of FY26, missing the analysts’ estimates for revenue of $433.45 million. Consolidated Adjusted EBITDA grew to $106.4 million, or 25.2% of sales, primarily driven by higher volume for hot-dip galvanized steel and operational productivity over the prior year.

Additionally, the fiscal first quarter cash from operations of $314.8 million, including proceeds from AVAIL’s sale of the Electrical Products Group, allowed the company to reduce debt by $285.4 million. The company ended the quarter with a net leverage ratio of 1.7x. Subsequent to the quarter, the company successfully closed a bolt-on acquisition within the Metal Coatings segment and announced the increase of the quarterly cash dividend to common shareholders from $0.17 to $0.20 per share. Capital expenditures for the first three months of fiscal year 2026 were $20.9 million, including $3.2 million of spending related to the new Washington, Missouri facility, and full fiscal year capital expenditures are expected to be approximately $60 – $80 million. Pursuant to the Company’s existing $100 million Share Repurchase Program, the Company has a remaining balance of $53.2 million available for repurchases.

For fiscal year 2026, AZZ provided guidance of $5.75-$6.25 for adjusted EPS, compared to the analyst consensus of $5.88. The company expects revenue to be between $1.63-1.73 billion, in line with the consensus estimate of $1.68 billion.