AZZ Inc. Reports 16.6% Revenue Growth but Decline in Net Income for Q2 Fiscal 2027

AZZ Inc. reported its financial results for the second quarter of fiscal 2027, revealing a total revenue of $486.9 million for the three months ended August 31, 2026, a 16.6% increase from $417.3 million in the same period last year. The company's net income for the quarter was $58.5 million, down from $89.3 million a year earlier, resulting in diluted earnings per share of $1.94, compared to $2.95 in the prior year. The decline in profitability was attributed to a significant decrease in equity earnings from the AVAIL joint venture, which included a substantial gain from the sale of the Electrical Products Group in the previous year.

In terms of operational performance, AZZ's Metal Coatings segment saw sales rise by 22.9% to $233.5 million, driven by increased steel processing volumes and higher average selling prices due to inflationary pressures. The Precoat Metals segment also experienced an 11.5% increase in sales to $253.4 million, primarily due to higher volumes of coils coated, particularly in the construction and container markets. However, the overall gross margin for the company increased to $122.1 million, up from $101.3 million, reflecting improved operational efficiency despite rising costs.

Strategically, AZZ completed the acquisition of Seattle Galvanizing on July 30, 2026, for approximately $57.5 million, which is expected to enhance its geographic footprint in the Pacific Northwest. This acquisition is part of AZZ's ongoing efforts to expand its capabilities in the metal coatings sector. The company also reported a significant increase in its cash and cash equivalents, which rose to $1.95 million from $705,000 at the end of February 2026, indicating improved liquidity.

Operationally, AZZ's total assets increased to $2.34 billion as of August 31, 2026, compared to $2.21 billion at the end of the previous fiscal period. The company reported a total debt of $500 million, with a weighted average interest rate of 5.23%. The company’s liquidity position remains strong, with total liquidity of $376.4 million, including available capacity under its Revolving Credit Facility. Looking ahead, AZZ anticipates continued demand for its products, particularly in the construction and industrial sectors, although it remains cautious about potential economic fluctuations and inflationary pressures impacting raw material costs.