Steel Mills

Worthington Reports 32% Increase in Construction Shipments

March 23, 2016

Worthington Industries reported net sales of $647.1 million for third quarter 2016, ending February 29. Sales were down from second quarter and year over year as a result of lower volume in Pressure Cylinders and Engineered Cabs, combined with lower average selling prices in Steel Processing due to a decline in the market price of steel.

Net earnings were $29.6 million up from $23.2 million in second quarter and a loss of 25.7 million in Q3 2015.

Steel processing operating income was up $6 million from the previous year due to improved inventory management and modest hedge gains that were offset by lower tolling volume at the Spartan JV.

Steel processing shipment volume was down 4 percent but better than MSCI data that declined 7 percent for the same period. Growth of service center shipments slowed in the quarter. Construction shipments were up 32 percent and automotive 3 percent.

Mark Russell, President and Chief Operating Officer attributed the variance from MSCI data to strength in construction and margin improvement due to trade case decisions.

“As you know, the trade case have come through on coated products first and that kind of widened the spread between coated and hot-rolled and cold-rolled,” said Russell. “And we have hot-roll-based galv and cold roll-based galv both. And those wide spreads helped us win market share, I think, in the construction market.”

John McConnell, Chairman and Chief Executive Officer commented, “We definitely see that the trade cases have an immediate effect on market sentiment.”

Heavy truck and agriculture were Worthington’s weakest market in Q3. Industrial products were up by 2 percent and consumer products down 5 percent.

The oil and gas equipment market continues to decline, said Russell, with limited short term capital purchases by major producers.