AZZ Inc (NYSE: AZZ) stock rose 5.94% on July 8th, 2019 (Source: Google finance) but slightly declined over 0.3% on 9th July, 2019 (as of 9:39 am GMT-4; Source: Google finance) after the company reported a 35.4% rise in earnings for the first quarter of fiscal 2020 driven by strong contribution from Energy and Metals Coatings segments. The company has also reaffirmed its fiscal 2020 earnings and sales guidance.
AZZ in the first quarter of FY 20 has reported 10.3% rise in the revenue to $289.1 million on the back of the Energy segment, given a normal Spring season for turnarounds, made a solid contribution. The company has reported the consolidated net income of $21.3 million this year compared to $15.7 million in the first quarter last year. The Metals Coatings segment continues to strengthen with increased demand and improved operational efficiencies. The metal coatings segment experienced increased demand in the solar and petrochemical markets and contribution from the acquisition of Tennessee Galvanizing in K2 partners. Energy segment revenue grew by 14% while Metals Coatings segment revenue rose by 6%. Operating margins increased to 24.1% compared to 21.9% in the first quarter of fiscal 2019. This is due to lower zinc costs flowing through the kettles value pricing and the immediate contribution the two acquisitions made in the quarter.
Moreover, the first quarter fiscal 2020 gross margins improved to 22.9% from the 22.4% on a year-over-year basis primarily on strong margin performance in the Metal Coatings Segment. Operating profit for the first quarter fiscal 2020 grew from $23.7 million in the prior year to $31 million in the current year representing a 30.7% increase. Operating margins of 10.7% increased a 170 basis points compared to 9% in the prior year.
Consolidated bookings declined by 13% year-over-year to $256.3 million. During the first half of fiscal year 2019, AZZ has booked two large Chinese orders with $45 million in the first quarter and $55 million in the second quarter and also had a very large international order for welding solutions.
Backlog at the end of the first quarter decreased 1.6% to $300.1 million, with about 44% of the current backlog is expected to be delivered outside the US, compared to 43% in the previous year quarter.
The company reaffirmed its fiscal 2020 earnings guidance and expects it to be in the range of $2.25 to $2.75 per share. The company expects the annual sales to be in the range of $0.95 billion to $1.03 billion. The company remained somewhat cautious due to the uncertainty related to tariffs and the Chinese trade situation, as well as the tighter market for labor in many of its US locations.