Why AZZ Shares Got Zapped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electrical products and services specialist AZZ (NYSE: AZZ  ) sank 10% today after its quarterly results and outlook missed Wall Street expectations.

So what: The stock has been a roller coaster in 2013 due to lumpy electrical equipment demand, and today's Q2 results -- earnings grew just 3% -- coupled with downbeat Q3 guidance, only reinforces that lack of consistency. While revenue jumped 24%, operating margins at its main electrical products and services segment sank 370 basis points to 10.3%, giving analysts some concern over AZZ's ability to grow profitably.

Now what: Management now sees current-quarter EPS of $0.65-$0.75 on revenue of $210 million-$230 million in revenue, well below the consensus of $0.95 and $248 million. "Our businesses are well positioned to capture a meaningful share of [infrastructure spending] which we expect to occur in fiscal 2015," CEO David Dingus reassured investors. "We remain very bullish on our opportunities and look forward to seeing those come to fruition in fiscal 2015 and beyond." With the stock now off about 20% and trading at a forward P/E of 11, contrarian Fools might want to consider betting on that bullishness. 

More Compelling Income Opportunities
Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2658079, ~/Articles/ArticleHandler.aspx, 12/19/2014 4:17:54 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement