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Feb 28, 2022
Worthington Q3 2022 Earnings Report
Reported strong financial performance despite operating environment challenges and inventory holding loss headwinds.
Key Takeaways
Worthington Industries reported a strong Q3 performance with net sales significantly up due to higher steel prices and recent acquisitions. EPS was $1.11, compared to $1.27 in the prior-year quarter. The company faced inventory holding losses but saw increased sales and managed to navigate a volatile market effectively.
Net sales increased significantly to $1.4 billion, driven by higher steel prices, acquisitions, and increased selling prices.
Earnings per share (EPS) was $1.11, compared to $1.27 in the prior-year quarter.
The company experienced inventory holding losses of $25 million, impacting gross profit and adjusted EBITDA.
Demand remains strong across most product lines, but operating challenges persist, including labor, supply chain, and steel price volatility.
Revenue by Segment
Forward Guidance
The business environment continues to be very challenging. The company is well positioned for whatever the market brings next.
Positive Outlook
- End market demand remains strong across most product lines.
- Commercial, purchasing, and supply chain teams have effectively reacted to higher input costs with price increases.
- Experts in steel processing continue to manage through volatility without compromising customer quality and service.
- Benefit of higher selling prices was particularly noticeable in the year-over-year improvement in consumer products and building products.
- Committed to adopt science-based targets for greenhouse gas emissions.
Challenges Ahead
- Operating challenges remain, including labor availability, supply chain disruptions, transportation shortages, and an extremely volatile steel pricing environment.
- Sustainable energy solutions is struggling due to lower automotive demand in Europe and higher input costs.
- European market remains challenged and the ongoing war in Ukraine has caused business conditions in Europe to deteriorate further with materially increased energy prices and demand uncertainty.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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