Worthington Industries Q3 Profit Up 9%, But Misses View, Revenues Beat

(RTTNews) - Diversified metal manufacturer Worthington Industries, Inc. (WOR) on Thursday reported a 9 percent increase in profit for the third quarter from last year on higher sales that reflected increased volume and the positive impact of acquisitions. However, earnings per share for the quarter missed analysts' expectations by a penny, while revenues beat their estimates.

John McConnell, Chairman and CEO of Worthington Industries said in a statement, "We had a strong quarter, the best third quarter earnings per share in our history, with solid earnings growth despite enduring extreme weather conditions which hampered some of our business activity."

Columbus, Ohio-based Worthington Industries' net earnings for the third quarter were $40.60 million or $0.57 per share, up from $37.13 million or $0.52 per share in the prior year. On average, seven analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 25 percent to $773.23 million from $619.53 million in the year-ago period, reflecting higher overall volumes that were aided by the impact of acquisitions. Analysts had a consensus revenue estimate of $760.73 million for the quarter.

Gross margin rose 26 percent from the prior-year period to $122.49 million, primarily the result of an increase in volumes and to a lesser extent an improved spread between average selling prices and material costs.

Segment wise, Steel Processing's net sales for the quarter rose 35 percent from last year to $478.0 million, on higher volumes resulting primarily from the consolidation of TWB and increased sales in the automotive, construction and agriculture markets.

Pressure Cylinders' net sales increased 14 percent to $233.3 million, driven by the recently-acquired oilfield equipment and strong retail product volumes.

McConnell said, "Steel Processing had a very good quarter with strong volume from the automotive and construction markets. Pressure Cylinders had strong contributions from our branded consumer products, oilfield products, and the heating tank business."

Engineered Cabs' net sales rose 6 percent to $51.5 million, reflecting higher volumes.

The "Other" category includes the Construction Services and Energy Innovations operating segments, as well as non-allocated corporate expenses. The segment's net sales declined 11 percent from the year-ago period to $10.5 million, mostly due to the Construction Services business.

Looking ahead, McConnell said, "We anticipate the fourth quarter, historically our strongest, to yield a solid performance to finish out our fiscal year. We will continue to pursue our strategy of growth with our existing businesses as well as through acquisition opportunities in growing markets."

On March 26, 2014, Worthington Industries' board of directors declared a quarterly dividend of $0.15 per share. The dividend is payable on June 27, 2014 to shareholders of record on June 13, 2014.

WOR closed Wednesday's trading at $40.48, down $0.52 on a volume of 600,300 shares.