Worthington Steel Inc. reported its fiscal 2026 third‑quarter results for the quarter ended February 28, 2026, with revenue of $769.8 million and an adjusted earnings per share of $0.27. The company’s adjusted EPS fell short of the consensus estimate of $0.47, a miss of $0.20 or 42.5 percent, while revenue also missed the $882.95 million estimate by $113.15 million.
Net sales rose 12 percent year‑over‑year to $769.8 million, driven by a 12 percent increase in direct volumes and higher selling prices. However, operating income contracted sharply to $3.1 million from $18.3 million in the same quarter a year earlier, reflecting the impact of higher SG&A expenses, including $15.4 million in professional fees related to the Kloeckner acquisition. Net earnings attributable to the company’s controlling interest fell to $10.4 million from $13.8 million YoY, and diluted EPS declined to $0.20 from $0.27 a year earlier. Adjusted diluted EPS also slipped to $0.27 from $0.35.
The company’s guidance for the first quarter of fiscal 2027 projects an adjusted EPS of $0.95 and revenue of $1.016 billion, indicating a modest upside relative to the prior year’s $0.35 EPS and $882.95 million revenue. Management noted that the company remains focused on its safety‑first culture and disciplined execution, even as it navigates macroeconomic headwinds. The acquisition of Kloeckner & Co SE is described as a transformational step that will support long‑term value creation, while an unfavorable contribution from the recently acquired Sitem Group has weighed on gross margin.
Geoff Gilmore, President and CEO, said, "This was a challenging quarter from a macroeconomic standpoint, but our focus did not change. We remained grounded in our safety‑first culture, executed with discipline and continued to serve customers well. We also took an important step forward with our proposed acquisition of Kloeckner, which we believe will be transformational for Worthington Steel and support long‑term value creation." The company also declared a quarterly dividend of $0.16 per share, payable on June 26, 2026.
Industry analysts note that the steel processing sector is facing weak demand in European markets, and Worthington Steel ranks in the bottom 31 percent of the Zacks Steel – Specialty industry. The company’s results underscore the challenges of balancing growth in direct volumes with the cost pressures and headwinds in toll volumes, while the strategic acquisition of Kloeckner is positioned to broaden its product portfolio and geographic reach.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.