Steel Product Producers

Worthington Steel earnings fall, sales inch up
Written by Ethan Bernard & Laura Miller
June 26, 2024
Worthington Steel
Fourth quarter ended May 31 | 2024 | 2023 | Change |
---|---|---|---|
Net sales | $911.0 | $884.0 | 3.1% |
Net earnings | $53.2 | $67.3 | -21.0% |
Per diluted share | $1.06 | $1.37 | -22.7% |
Twelve months ended May 31 | |||
Net sales | $3,430.6 | $3,607.7 | -4.9% |
Net earnings | $154.7 | $87.1 | 77.6% |
Per diluted share | $3.11 | $1.77 | 75.7% |
Worthington Steel’s earnings slipped in its fiscal fourth quarter while sales ticked up.
The Columbus, Ohio-based steel processor posted net earnings attributable to controlling interest of $53.2 million in fiscal Q4’24, sliding 21% from $67.3 million a year earlier. Sales rose 3% to $911 million.
While quarterly shipments were down 2% from last year to just over 1 million tons, Worthington attributed the boost in total sales to a 4% rise in direct selling prices and a more favorable mix in toll processing.
Worthington’s operating income fell $22.5 million from the same quarter last year to $67.3 million. This was primarily due to a $19.2-million drop in gross margin and a $10.6-million increase in selling, general, and administrative expenses (SG&A).
The driving factors for higher SG&A were a jump in wage and benefit costs, costs related to being a stand-alone public company, and increased bad debt expense.
Recall that Worthington Industries completed its planned split into two separate companies, Worthington Steel Inc. and Worthington Enterprises Inc., on Dec. 1.
“Worthington Steel saw a solid performance in Q4 and finished fiscal 2024 strong,” President and CEO Geoff Gilmore said in a statement on Wednesday. “As we enter fiscal 2025, we remain focused on executing our strategy and driving shareholder value through organic growth and strategic M&A.”
Steel pricing was “volatile” in the quarter and remains “unsettled,” according to CFO Tim Adams, who spoke on an earnings call on Thursday. He said Q4’24 inventory losses were estimated to be $3.4 million, and he expects Q1’25 losses to be $15-20 million on a pre-tax basis.
End-use markets
The automotive sector, Worthington’s largest end market, accounted for 52% of Q4 sales and “remains solid,” according to EVP and COO Jeff Klingler.
“We believe North American light-vehicle production could return to pre-Covid levels of more than 16 million units as early as next calendar year,” he commented on the earnings call.
Adams noted that the automotive industry will see its typical summer slowdown, but he expects auto plants’ downtime for model-year turnovers to last “roughly two weeks for most automobiles,” which is on pace with last year.
Construction is Worthington’s second-largest end market. Sales in this sector accounted for 14% of total Q4’24 sales, up two percentage points from last year. Klingler said the company saw strength in fencing and metal buildings during the quarter.
Executives expressed optimism about the company’s electrical steel operations. Two expansion projects—one in Mexico and another in Canada—are on track and on budget, with approximately $25 million invested in each facility thus far. Both projects are expected to be fully operational by the end of 2025.

Ethan Bernard
Read more from Ethan Bernard
Laura Miller
Read more from Laura MillerLatest in Steel Product Producers

Op-Ed: Ternium CEO Máximo Vedoya wants a fair future forged in steel
After recently receiving an industry honor on behalf of Ternium, I had the opportunity to reflect and share my vision on the state and future of our industry.

Nippon eyeing new $4B U.S. Steel mill to sweeten deal: Report
Nippon Steel could build a new domestic U.S. Steel mill with a total investment of $4 billion.

Nucor cuts CSP by $20/ton, third straight drop
Nucor has lowered its consumer spot price by $20 per short ton, marking the third consecutive weekly decrease.

Nucor reports IT systems breach
Nucor said it temporarily and proactively halted some production operations at various locations.

Cliffs talks DOE funding, blast furnace relining schedule
The future of two projects supported in part by funding through the Department of Energy remains uncertain.