Mixed Bag from Worthington, Profit Jumps - Analyst Blog
March 26 2013 - 3:40AM
Zacks
Metal processor – Worthington Industries,
Inc.’s (WOR) earnings of 52 cents a share for
third-quarter fiscal 2013 (ended Feb 28, 2013) beat the Zacks
Consensus Estimate by 3 cents and exceeded the year-ago earnings of
37 cents.
Profit shot up 43% year over year
to $37.1 million, aided by healthy results from the company's
pressure cylinders business. Both restructuring and joint venture
transaction costs fell significantly in the reported quarter,
thereby boosting the bottom line.
Revenue edged up 1% year over
year to $619.5 million but missed the Zacks Consensus Estimate of
$677 million. Higher volumes aided by acquisitions were partly
masked by lower average selling prices due to falling market price
of steel.
Gross margin increased to 15.7%
from 13.6% a year ago. Acquisitions and better product mix in
pressure cylinders business contributed to the
increase.
Segment
Highlights
Revenues in the core Steel
Processing division fell 5% year over year to $349.6 million on
lower pricing. Volumes fell 11% year over year to 636 units in the
quarter.
Worthington’s Pressure Cylinders
segment was the bright spot with revenues rising 9% year over year
to $205.2 million, buoyed by the acquisition of leading atmospheric
tanks and pressure vessels maker Westerman Companies. Volumes edged
down 0.4% to 17,861 units.
The Engineered Cabs segment,
which consists of the operations of Angus Industries Inc. (acquired
in late 2011), posted revenues of $48.6 million in the quarter. The
division’s results were affected lower volumes due to production
delays.
Financial
Position
Worthington exited the quarter
with cash and cash equivalents of $37.4 million, up 6% year over
year. Long-term debt increased 61% year over year to $406.5
million. Operating cash flows decreased 58% year over year to $36.3
million.
Outlook
Moving ahead, Worthington expects
a favorable environment to support its results in the fourth
quarter. The company remains committed to expand its capabilities
in the energy market. Worthington will continue to explore
additional opportunities for growth both organically and through
new businesses.
Worthington is engaged in
processing steel for application in the automotive, construction,
hardware, agricultural, aerospace and other industries. The company
makes a range of processed steel items, pressure cylinders
(including oxygen and helium tanks and hand torches), metal framing
products, racks, shipping pallets, airbrake tanks and consumer
products. The company operates 80 facilities throughout 12
nations.
Worthington recently achieved the
“Partner-Level Supplier” recognition for 2012 in the John Deere
achieving excellence program. It is the highest supplier rating of
Deere & Company (DE).
Worthington currently retains a
Zacks Rank #2 (Buy).
Other metal processors worth
considering are Kaydon Corporation (KDN) and
NSK Ltd. (NPSKY). Both hold a Zacks Rank #2
(Buy).
DEERE & CO (DE): Free Stock Analysis Report
KAYDON CORP (KDN): Free Stock Analysis Report
NSK LTD -UN ADR (NPSKY): Get Free Report
WORTHINGTON IND (WOR): Free Stock Analysis Report
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