AZZ Inc (NYSE:AZZ) stock fell 12.61% (As on October 11, 12:15:33 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the second quarter of FY 23. Metal Coatings Segment (41% of sales) posted record sales of $165.8 million, up 26.2%. Improved sales were driven by pricing strategies to offset inflationary costs, and increased volume for hot-dip galvanizing within the renewables, utility, OEM, and construction markets. Results this quarter include both DAAM Galvanizing, Steel Creek Galvanizing, and the addition of AZZ Tubular Products that previously was reported as part of the divested AIS segment. Precoat Metals Segment (59% of sales) posted record sales of $240.9 million. Increased sales were driven primarily by significantly higher average selling price from paint cost pass-through. Higher operating costs driven by inflation. The Company generated year-to-date operating cash flows of $42.0 million through strong earnings and managing working capital to mitigate supply chain volatility while supporting strong sales growth. At the end of the second quarter, cash and cash equivalents were $14.3 million. AZZ did not purchase company stock in the second quarter and approximately $55.2 million remains on the current authorization with no expiration.  Capital expenditures for continuing operations were $12.3 million during the quarter, and $2.9 million related to discontinued operations. Due to the acquisition of Precoat Metals, and the recently announced completion of the divestiture of a controlling (60%) interest in the Company’s Infrastructure Solutions segment, via the AIS JV, AZZ will not issue full-year fiscal year 2023 guidance at this time.

AZZ in the second quarter of FY 23 has reported the adjusted earnings per share of $1.24, missing the analysts’ estimates for the adjusted earnings per share of $1.38. The company had reported the adjusted revenue of $406.7 million in the second quarter of FY 23, missing the analysts’ estimates for revenue of $470.94 million. Net loss of $(58.6) million due to recording the estimated loss on the divestiture of AIS JV. As adjusted net income of $35.9 million, up $16.9 million or 89.3%

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.