AZZ’s third quarter saw a negative market response as the company’s revenue came in below Wall Street consensus, despite modest year-over-year growth. Management cited strong infrastructure and utility project demand as a positive for the Metal Coatings segment, but highlighted that the Precoat Metals business faced persistent headwinds from tariffs and weak construction markets. CEO Tom Ferguson noted that “operational improvements in Metal Coatings and ongoing market share gains in Precoat” only partially offset the impact of softer end-market demand, particularly in building construction and appliances.

Is now the time to buy AZZ? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From AZZ’s Q3 Earnings Call

• Ghansham Panjabi (Baird) asked about the sustainability of Precoat Metals’ market share gains amid ongoing tariffs. CEO Tom Ferguson explained that share gains are likely to persist if tariffs remain, but margins may be pressured due to the nature of smaller, rapid-turn orders.
• Nick Giles (B. Riley Securities) inquired about the ramp-up of the Washington facility and its impact on future earnings. CFO Jason Crawford said the facility is on track to reach higher utilization in the second half of the year, with incremental margin improvement expected as volumes increase.
• Timna Tanners (Wells Fargo) questioned whether the import opportunity from tariffs has fully played out. Ferguson responded that the positive impact is still in early stages and may provide ongoing support if customer adoption continues.
• Adam Thalhimer (Thompson Davis) pressed for clarification on the negative impacts of tariffs on Precoat, and Ferguson noted that while tariffs reduce imports, they also create uncertainty and project delays in non-infrastructure markets.
• Mark Reichman (Noble Capital Markets) asked about interest expense trends and SG&A expectations. Crawford provided detail on cost control measures, noting that interest expense should decline further as debt is paid down, and SG&A is expected to remain near current levels as a percentage of sales.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely watch (1) the capacity ramp and margin contribution from the Washington, Missouri facility, (2) sustained market share gains in Precoat Metals as tariffs persist, and (3) the impact of ongoing federal infrastructure spending on Metal Coatings demand. Progress on bolt-on acquisitions and operational efficiency upgrades will also be important indicators of AZZ’s execution against its strategic plan.

AZZ currently trades at $100.36, down from $105.94 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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