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COLUMBUS, Ohio - Worthington Steel , Inc. (NYSE:WS) reported third quarter fiscal 2025 results that fell short of analyst expectations, sending shares down 4.95% in trading following the announcement.
The value-added metals processing company posted adjusted earnings per share of $0.35 for the quarter ended February 28, 2025, missing the analyst consensus estimate of $0.67 by $0.32. Revenue came in at $687.4 million, down 15% YoY from $805.8 million in the same quarter last year.
Net sales declined primarily due to lower volume and lower direct selling prices. Direct tons sold decreased 7% while toll tons sold fell 15% compared to the prior year quarter.
Gross margin dropped $38.9 million YoY to $81.2 million, driven mainly by lower direct spreads and reduced volume. Operating income plunged to $18.3 million from $66.3 million a year ago.
"As expected, the headwinds from the second quarter continued into our third quarter of fiscal 2025 as customers managed uncertainty," said CEO Geoff Gilmore. "During the last month of the quarter, we saw signs of fundamental demand improvements."
The company maintained its quarterly dividend of $0.16 per share, payable on June 27, 2025.
Worthington Steel noted it continues to progress on its agreement to acquire a controlling stake in Italy-based Sitem Group, with regulatory approval received and closing expected in early fiscal 2026.
Despite the earnings miss, the company generated free cash flow of $25.2 million in Q3, up from $22.3 million in the prior year quarter. Worthington Steel ended the period with a net debt position of $48.9 million.
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