Worthington Steel (NYSE:WS) Issues Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Worthington Steel (NYSE:WS) released its quarterly earnings results on Thursday, June 25th. The company reported $0.74 EPS for the quarter, beating analysts’ consensus estimates of $0.73 by $0.01, Zacks reports. The firm had revenue of $929.20 million for the quarter, compared to analyst estimates of $992.00 million. Worthington Steel had a net margin of 0.50% and a return on equity of 8.85%. The company’s revenue for the quarter was up 11.6% compared to the same quarter last year. During the same period in the previous year, the business earned $1.05 earnings per share.

Here are the key takeaways from Worthington Steel’s conference call:

• Worthington Steel completed the Klöckner & Co. acquisition, becoming a majority shareholder and calling it the largest deal in company history. Management said the transaction materially expands scale, capabilities, end-market diversification, and long-term synergy potential.
• Fourth-quarter results were mixed, with net sales up 12% to $929.2 million, adjusted EBITDA of $75.2 million, and adjusted EPS of $0.74. Reported earnings were weighed down by transaction costs and a large non-cash impairment in the electrical steel business.
• The company recorded a $94.5 million non-cash impairment in its electrical steel reporting unit due to softer European activity, more foreign competition in the U.S., and a temporary slowdown in industrial motor demand. Management said this does not change the long-term attractiveness of the segment, but it hurt near-term results.
• Operational initiatives continue to show meaningful productivity gains, including a 37% inventory reduction at the Bowling Green facility while maintaining 100% on-time delivery. Management said these lean-flow methods are being expanded across the footprint and could support future synergy capture and working-capital improvements.
• Management reiterated confidence in achieving $150 million of EBITDA synergies from Klöckner, along with about $150 million of working-capital opportunities, and expects to cut debt in half over the same period. The company also expects combined results to begin showing up next quarter as integration progresses.

Worthington Steel Stock Performance

Shares of Worthington Steel stock opened at $33.16 on Monday. The company has a debt-to-equity ratio of 0.04, a current ratio of 1.46 and a quick ratio of 0.92. The firm has a 50 day simple moving average of $39.06 and a 200 day simple moving average of $38.07. Worthington Steel has a fifty-two week low of $27.22 and a fifty-two week high of $49.17. The firm has a market cap of $1.68 billion, a P/E ratio of 23.86 and a beta of 2.34.

Worthington Steel Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, September 29th. Investors of record on Tuesday, September 15th will be issued a $0.16 dividend. The ex-dividend date of this dividend is Tuesday, September 15th. This represents a $0.64 dividend on an annualized basis and a dividend yield of 1.9%. Worthington Steel’s dividend payout ratio (DPR) is currently 46.04%.

Wall Street Analysts Forecast Growth

WS has been the topic of several recent analyst reports. Weiss Ratings reissued a “hold (c)” rating on shares of Worthington Steel in a report on Monday, April 20th. KeyCorp reaffirmed an “overweight” rating on shares of Worthington Steel in a report on Monday, June 29th. Wall Street Zen lowered Worthington Steel from a “buy” rating to a “hold” rating in a research note on Sunday. Finally, Zacks Research upgraded Worthington Steel from a “strong sell” rating to a “hold” rating in a report on Monday, May 25th. One equities research analyst has rated the stock with a Buy rating and two have given a Hold rating to the stock. According to MarketBeat, the company currently has a consensus rating of “Hold” and a consensus target price of $46.00.

Insiders Place Their Bets

In other news, COO Jeffrey R. Klingler sold 20,036 shares of the company’s stock in a transaction on Tuesday, June 2nd. The stock was sold at an average price of $43.82, for a total transaction of $877,977.52. Following the transaction, the chief operating officer owned 93,212 shares of the company’s stock, valued at $4,084,549.84. This represents a 17.69% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, CFO Timothy A. Adams sold 2,367 shares of the company’s stock in a transaction on Monday, June 1st. The shares were sold at an average price of $42.27, for a total value of $100,053.09. Following the transaction, the chief financial officer directly owned 44,098 shares in the company, valued at $1,864,022.46. This trade represents a 5.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 33,708 shares of company stock valued at $1,431,830. 2.60% of the stock is currently owned by corporate insiders.

Institutional Trading of Worthington Steel

Several institutional investors and hedge funds have recently added to or reduced their stakes in WS. Kestra Advisory Services LLC acquired a new stake in shares of Worthington Steel during the 4th quarter worth approximately $67,000. Tower Research Capital LLC TRC lifted its holdings in Worthington Steel by 149.9% in the second quarter. Tower Research Capital LLC TRC now owns 2,354 shares of the company’s stock valued at $70,000 after buying an additional 1,412 shares during the period. BNP Paribas Financial Markets lifted its holdings in Worthington Steel by 50.9% in the second quarter. BNP Paribas Financial Markets now owns 3,492 shares of the company’s stock valued at $104,000 after buying an additional 1,178 shares during the period. Schroder Investment Management Group bought a new position in Worthington Steel in the fourth quarter valued at approximately $201,000. Finally, MML Investors Services LLC bought a new position in Worthington Steel in the fourth quarter valued at approximately $208,000. 45.41% of the stock is owned by institutional investors.

About Worthington Steel

Worthington Steel (NYSE: WS) is a leading North American steel processor specializing in the production of flat-rolled, coated and painted sheet and coil products. Operating as a wholly owned subsidiary of Worthington Industries, the company serves a broad range of industries, including construction, automotive, appliance, energy and agricultural equipment. Its core business activities encompass the processing, finishing and distribution of carbon and advanced high-strength steels, aluminum and stainless products to manufacturers across the continent.

The company’s product portfolio includes hot-dip galvanizing, galvannealed, aluminized and pre-painted steel products, as well as cold-rolled and hot-rolled coil.