Steel Mills

Worthington's Quarterly Earnings Slip
Written by Sandy Williams
September 28, 2017
Despite a run of disruptions during its first quarter, Worthington CEO and Chairman John McConnell is optimistic about the new fiscal year.
“We believe that most of the markets we serve are healthy with some showing more strength than others,” said McConnell. “We are off to a good start in fiscal 2018.”
Worthington Industries’ earnings dipped in the first quarter of FY 2018 despite higher sales. The company posted net earnings of $45.5 million, down 31 percent from a year ago, and net sales of $848.2 million. Steel processing drove most of the earnings decline with an inventory holding loss of $1.5 million compared to the unusually high $17 million of inventory holding gains in last year’s first quarter.
Operating income decreased to $42.2 million as result of lower gross margin and expenses associated with the acquisition of pressure cylinder and water tank manufacturer Amtrol.
“We started off our new fiscal year with good results, though not as strong as last year’s record quarter,” said John McConnell, chairman and CEO. “We saw increases in our heavy truck and agriculture volumes, while there was some softening in automotive. In the Cylinders business, we saw increasing demand for our oil and gas equipment, and integration of our newest acquisition, Amtrol, is going well. While our joint venture ClarkDietrich was negatively impacted by higher steel costs, WAVE and Serviacero both had improved results.”
Steel processing net sales improved 7.0 percent year-over-year to $543.5 million. Steel processing volume decreased to 968,330 tons from to 1,031,498 in Q1 2016. Direct versus toll tons processed was 56 percent to 44 percent, compared to 52 percent to 48 percent in Q1 2017.
A multi-week furnace outage at the Delta galvanizing facility, minor flooding in Monroe, Ohio, and continued startup challenges at Worthington’s Mexico TWB operations resulted in higher manufacturing expenses of $2.5 million, said Executive Vice President and CFO Andy Rose.
The ClarkDietrich joint venture operations in Texas, Florida and Georgia experienced some disruption from the hurricanes, losing power and halting production for several days.
The company’s pressure cylinder sales rose 31 percent to $269.8 million due to the Amtrol acquisition and higher volumes in the oil and gas equipment business.
Engineered cabs net sales jumped 25 percent to 31.9 million on higher volume, but turned in an operating loss of $0.4 million, $1.4 million less than the prior quarter.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills

Hot-rolled coil market remains slow, market participants say
Hot rolled spot market participants reported another week of moderate demand and ample supply, with no strong signs that conditions will change next week.

CRU: Blackout knocks out ArcelorMittal mill ‘for months’
Truchas works in Lazaro Cadenas, Michoacan, western Mexico. Repairs may take up to six months.

Nippon Steel posts quarterly loss on cost to buy U.S. Steel
Nippon Steel earnings take hit from buy of U.S. Steel.

Atlas completes Evraz NA deal, renames firm, and hires former USS exec as CEO
Atlas Holdings has completed its acquisition of Evraz North America (Evraz NA) and its subsidiaries.

ArcelorMittal: As tariffs slow global growth, Calvert could be a bright spot
ArcelorMittal expects less demand growth across most of the markets it operates in, including the US, because of President Donald Trump’s tariffs. But the Luxembourg-based steelmaker also thinks it stands to benefit from an increasingly regionalized world thanks to investments like the new EAF at its mill in Calvert, Ala.