By Sarfaraz A. Khan. Research Asst. Adnan Mushtaq
Worthington Industries, the supplier of pressure tanks and cylinders, managed to increase its sales and profits in its recent quarterly results. The strength in the automotive sector could continue to fuel its growth. The company, however, faces two major headwinds.
On December 17, Worthington released its third quarter results in which its net sales and earnings came in at $871 million and $0.43 a share, showing an increase of 13.1% and 34.4% from the same quarter last year. However, on an adjusted basis, the earnings fell by around 1.8% to $0.55 a share. Analysts, on the other hand, were expecting profit of $0.66 a share from revenues of $871 million, as per data compiled by Thomson Reuters.
The company generates 63% of its net sales from its steel processing segment, 29% from pressure cylinders and the majority of the remaining come from the engineered cabs division.
Net sales from steel processing clocked in at $552.8 million, rising 12% year-over-year thanks to greater volumes and increased selling prices. However, the operating income from this segment reduced marginally due to higher production and inventory holding costs. On the pressure cylinders front, the recent acquisitions drove the net sales up by 18% to $252 million while operating income rose 15.8% to $9.6 million.