Metal manufacturer Worthington Industries Inc. (WOR, Financial) reported its results for the first quarter of fiscal 2018 before the opening bell on Sept. 27.
The Columbus, Ohio-based company posted earnings per share of 70 cents, below expectations of 82 cents and down from $1.02 in the prior-year quarter. Quarterly revenue of $848.2 million missed estimates of $864.8 million but grew 15% from $737.5 million in the comparable quarter of 2016.
Shares were down more than 7% shortly after the market opened.
Chairman and CEO John McConnell said the company started the new fiscal year with good results but “not as strong as last year’s record quarter.”
The trend in Worthington’s revenue growth over the past decade is illustrated in the graph below.
According to the company, earnings were positively impacted by gains in inventory holdings, but $1.3 billion in pretax restructuring charges reduced EPS by 1 cent.
McConnell said results were aided by growing demand from the agriculture and heavy truck markets but hurt by a slowdown in the automotive market.
“In the Cylinders business, we saw increasing demand for our oil and gas equipment and integration of our newest acquisition, Amtrol, is going well,” he said. “While our joint venture ClarkDietrich was negatively impacted by higher steel costs, WAVE and Serviacero both had improved results.”
On June 2, the company acquired Amtrol, which manufactures pressure cylinders and water system tanks, for $219.9 million.
As for outlook, McConnell said Worthington is “operating well” as it continues to improve companywide operations.
“We believe that most of the markets we serve are healthy with some showing more strength than others,” he added. “We are off to a good start in fiscal 2018.”
With 1.35% of outstanding shares, Chuck Royce (Trades, Portfolio) is Worthington’s largest guru shareholder. Joel Greenblatt (Trades, Portfolio) and David Dreman (Trades, Portfolio) established positions in the second quarter. Diamond Hill Capital (Trades, Portfolio) also owns the stock.
Disclosure: I do not own any stocks mentioned.
