Free Annual Reports
Worthington Posts Worthy Earnings
Steelmaker Worthington Industries (NYSE:WOR) posted strong fourth-quarter results along with profitable numbers for its just ended fiscal year. The quarter's increase in steel-processing revenues, due to both higher sales volume and higher prices, is an encouraging sign.
IN PICTURES: Top 7 Social Security Myths: Exposed
A Corner Turned?
Worthington earned $33.1 million in its Q4, or 42 cents a share, compared to a loss of $13.7 million or a loss of 17 cents a share last year's quarter. Revenue increased to $626.4 million, up from $471.6 million. This was the first time in fiscal 2010 that the company posted a revenue increase for a quarter compared to its same quarter in fiscal 2009.
For the full year fiscal 2010, Worthington earned $45.2 million against a loss of $108.2 million in 2009, EPS of 57 cents versus a loss of $1.37 a share. Last year saw write-downs for inventory and restructuring.
For some context on Worthington's performance, prior to the steel industry's dive down in the recession, Worthington earned $1.33 a share in fiscal 2008. The company's annual revenue fell from more than $3 billion in FY 2008 to $2.6 billion in FY 2009, then shrank to $1.9 billion in FY 2010. The fourth-quarter revenue increase of 33% is a significant upturn, though not yet a trend.
Positive Signs After the Carnage
The great recession battered the steel industry. Bellwether US Steel (NYSE:X) had ghastly earnings. After annual profits of $7.44 per share in fiscal 2008 and a sky-high $18.02 EPS in fiscal 2009, the company posted a loss of $10.66 per share. Revenues were cut more than half from fiscal 2008 at $23.754 billion to $11 billion in fiscal 2009. This was more than the industry cycle, it was a business black hole powered by the global recession. US Steel shows signs of climbing out of this vortex and has projected earnings of $1.85 per share for fiscal 2010.
Other steelmakers find their prospects looking up as well. Nucor (NYSE:NUE) has earnings projections for $1.44 and $3.65 earnings per share for 2010 and 2011, respectively. Arcelor Mittal (NYSE:MT), already profitable this year, projects EPS of $2.65 and $4.24 for this year and next. Though estimates can be sliced if the economy worsens, even less generous figures bode well for the industry.
AK Steel Holdings (NYSE:AKS) recently announced it will tack on a $385 per ton surcharge for its electrical products that will be shipped in August, 2010. Worthington Industries is investing $11 million in a cylinder-building plant of its subsidiary, Worthington Cylinders. The gradual demand increase for steel products has fathered both the capital investment and the price increases.
Still a Cautious Environment
Although there have been glimmers of improvement in steel, and Worthington in particular, as far back as last fall, there are obvious cautions. The economy is still not well, with the poor job picture and the global malaise threatening to push down the nascent recovery. Worthington chief executive John McConnell commented in a Thomson Reuters piece that he believed "the economic environment in which we operate will continue to improve, though not linearly, in the next 24 months." This looks like a more reasonable assessment than the doomsday proclamations coming out of Wall Street right now.
Worthington Stock
This is a vibrant nearly billion-dollar market cap company, with its stock pummeled to near 52-week lows. Like the other steelmakers, it's worth watching the progress on its sales and earnings numbers as we slowly grind toward a more sustainable recovery. This stock could provide some handy profits as the economy improves. (To learn more about gauging a recovery, check out The Baltic Dry Index: Evaluating An Economic Recovery.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: Top 7 Social Security Myths: Exposed
A Corner Turned?
Worthington earned $33.1 million in its Q4, or 42 cents a share, compared to a loss of $13.7 million or a loss of 17 cents a share last year's quarter. Revenue increased to $626.4 million, up from $471.6 million. This was the first time in fiscal 2010 that the company posted a revenue increase for a quarter compared to its same quarter in fiscal 2009.
For the full year fiscal 2010, Worthington earned $45.2 million against a loss of $108.2 million in 2009, EPS of 57 cents versus a loss of $1.37 a share. Last year saw write-downs for inventory and restructuring.
For some context on Worthington's performance, prior to the steel industry's dive down in the recession, Worthington earned $1.33 a share in fiscal 2008. The company's annual revenue fell from more than $3 billion in FY 2008 to $2.6 billion in FY 2009, then shrank to $1.9 billion in FY 2010. The fourth-quarter revenue increase of 33% is a significant upturn, though not yet a trend.
Positive Signs After the Carnage
The great recession battered the steel industry. Bellwether US Steel (NYSE:X) had ghastly earnings. After annual profits of $7.44 per share in fiscal 2008 and a sky-high $18.02 EPS in fiscal 2009, the company posted a loss of $10.66 per share. Revenues were cut more than half from fiscal 2008 at $23.754 billion to $11 billion in fiscal 2009. This was more than the industry cycle, it was a business black hole powered by the global recession. US Steel shows signs of climbing out of this vortex and has projected earnings of $1.85 per share for fiscal 2010.
AK Steel Holdings (NYSE:AKS) recently announced it will tack on a $385 per ton surcharge for its electrical products that will be shipped in August, 2010. Worthington Industries is investing $11 million in a cylinder-building plant of its subsidiary, Worthington Cylinders. The gradual demand increase for steel products has fathered both the capital investment and the price increases.
Still a Cautious Environment
Although there have been glimmers of improvement in steel, and Worthington in particular, as far back as last fall, there are obvious cautions. The economy is still not well, with the poor job picture and the global malaise threatening to push down the nascent recovery. Worthington chief executive John McConnell commented in a Thomson Reuters piece that he believed "the economic environment in which we operate will continue to improve, though not linearly, in the next 24 months." This looks like a more reasonable assessment than the doomsday proclamations coming out of Wall Street right now.
Worthington Stock
This is a vibrant nearly billion-dollar market cap company, with its stock pummeled to near 52-week lows. Like the other steelmakers, it's worth watching the progress on its sales and earnings numbers as we slowly grind toward a more sustainable recovery. This stock could provide some handy profits as the economy improves. (To learn more about gauging a recovery, check out The Baltic Dry Index: Evaluating An Economic Recovery.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Greg Sushinsky
Greg Sushinsky is a passionate independent investor, who has done his own research, analysis and investing for 20 years. One of his earliest investing memories was when he first saved and bought U.S. Savings Bonds with his own money as a small child. From there, he studied investing on his own and made small stock purchases as he grew as an investor.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
Sushinsky still follows the markets, studies and reads widely in financial literature, and has written over 75 articles on investing. He is also a professional editor, whose work is published extensively in large-circulation magazines, digests and across the internet. In other pursuits, Sushinsky writes fiction and has a university degree in philosophy. To see more of Sushinsky's literary work, see http://writing.gregsushinsky.com/.
Free Annual Reports
