AZZ Inc. (AZZ) has reported a 27.94 percent fall in profit for the quarter ended Feb. 28, 2017. The company has earned $11.58 million, or $0.44 a share in the quarter, compared with $16.08 million, or $0.62 a share for the same period last year.
Revenue during the quarter dropped 10.96 percent to $193.76 million from $217.61 million in the previous year period. Gross margin for the quarter contracted 162 basis points over the previous year period to 23.59 percent. Total expenses were 89.59 percent of quarterly revenues, up from 87.79 percent for the same period last year. That has resulted in a contraction of 180 basis points in operating margin to 10.41 percent.
Operating income for the quarter was $20.18 million, compared with $26.58 million in the previous year period.
Tom Ferguson, president and chief executive officer of AZZ Inc., commented, "Fiscal 2017 was a challenging year. Our Galvanizing segment experienced reduced orders from soft markets in oil and gas, petrochemical, and solar. We continued to experience reduced refinery turnarounds and maintenance in our Energy segment during the fourth quarter and were also impacted by project delays for Westinghouse nuclear projects. Despite lower sales in both business segments, fiscal 2017 was AZZ’s 30th consecutive year of profitability, a testament to all the employees of AZZ."
For financial year 2018, AZZ Inc. projects revenue to be in the range of $880 million to $950 million. It forecasts diluted earnings per share to be in the range of $2.60 to $3.10 for the same period.
Operating cash flow declines
AZZ Inc. has generated cash of $111.18 million from operating activities during the year, down 22.57 percent or $32.41 million, when compared with the last year.
The company has spent $63.34 million cash to meet investing activities during the year as against cash outgo of $99.31 million in the last year.
The company has spent $76.62 million cash to carry out financing activities during the year as against cash outgo of $25.32 million in the last year period.
Cash and cash equivalents stood at $11.30 million as on Feb. 28, 2017, down 71.88 percent or $28.89 million from $40.19 million on Feb. 29, 2016.
Working capital decreases marginally
AZZ Inc. has witnessed a decline in the working capital over the last year. It stood at $154.69 million as at Feb. 28, 2017, down 3.88 percent or $6.24 million from $160.93 million on Feb. 29, 2016. Current ratio was at 2.09 as on Feb. 28, 2017, up from 2.08 on Feb. 29, 2016.
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