Steel Mills

Worthington Industries Posts Record Earnings for Q1 FY2017

September 29, 2016

Worthington Industries delivered record earnings in the first quarter of FY 2017 (ending August 31, 2016). Net sales totaled $737.5 million for net earnings of $65.6 million.

Gross margin increased $34.3 million year-over-year to $147.3 million primarily due to inventory holding gains of $17 million in Steel Processing which were partly offset by lower volume in Pressure Cylinders.

Steel processing net sales increased 3 percent year-over-year to $507.7 million driven by higher volume from the consolidation of the WSP joint venture with US Steel in March. Steel processing volume increased to 1,031,498 tons from 866,376 tons in the same period a year ago. The mix for tons processed was 52 percent direct and 48 percent toll. This compares to 60 percent and 40 percent, respectively in Q1 2016.

Worthington Industries benefited from higher steel prices and strong demand in automotive and construction, said Chairman and CEO John McConnell. Shipments for construction were up 29 percent, Detroit 3 automotive was flat, agriculture was down 6 percent, and heavy truck was the weakest, down 23 percent.

Pressured Cylinder sales were down 9 percent for the quarter due to lower volume in the oil and gas and industrial products businesses.

Engineered Cabs net sales fell 34 percent from the prior year due to declining market demand.

In his outlook remarks McConnell said:

“We believe that most of our markets will remain steady as we finish calendar year 2016 with normal seasonal slowdowns in automotive production. Our Transformation efforts are gaining traction in Pressure Cylinders, new product design is advancing in consumer products and its industrial products business is expanding the professional wholesale market into Europe this quarter.” McConnell added, “We’re off to a great start for fiscal 2017 and will to continue to navigate the ups and downs of the economy.”