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AZZ Inc. (AZZ) came under pressure following a rare earnings miss for fiscal Q2 (Aug), its first in over two years. The company—known for its hot-dip galvanizing and coil coating services—offers early insights into the manufacturing sector ahead of peak earnings season. However, this report raises some concerns.

• Revenue rose just 2% yr/yr to $417.3 mln, well below expectations, while EPS also missed estimates—marking a sharp reversal from a strong $0.20 beat in Q1.
• Despite the shortfall, AZZ reaffirmed its FY26 EPS and revenue guidance, suggesting confidence in a stronger second half.

Segment performance was mixed:

• Metal Coatings (MC): Sales grew 10.8% yr/yr to $190 mln, driven by volume growth and solid infrastructure-related demand across construction, industrial, and electrical transmission markets. Adjusted EBITDA margin dipped 90 bps to 30.8% due to mix shift, but this segment was clearly the bright spot.
• Precoat Metals (PM): Sales declined 4% yr/yr to $227.3 mln as demand softened in construction, HVAC, and appliance markets. EBITDA margin also fell 90 bps to 20.2% on lower volume.

Briefing.com Analyst Insight:

This was a disappointing quarter for AZZ, especially following a strong Q1. The miss in both revenue and EPS makes us more cautious for manufacturing names as we head into the heart of Q3 earnings season. While the FY26 guidance reaffirm is a modest positive, the weakness in Precoat Metals and soft demand in key end markets suggest broader industrial headwinds. AZZ may be a canary in the coal mine—raising a yellow flag for the rest of the manufacturing space.