Worthington Steel (NYSE:WS) Shares Gap Down on Disappointing Earnings

Key Points

• Worthington Steel shares fell sharply after the company reported quarterly EPS of $0.57, well below the $1.16 analyst consensus and down from $0.77 a year earlier. Revenue rose 212.4% year over year to $2.73 billion but missed estimates of $3.14 billion, contributing to an approximately 8.8% stock decline.
• The company declared a quarterly dividend of $0.16 per share, or $0.64 annualized, representing a yield of roughly 1.8% and a payout ratio of 46.04%.
• Analyst sentiment remains cautious, with the stock holding a consensus “Hold” rating and an average price target of $46; institutional investors own approximately 45.4% of the shares.

Worthington Steel, Inc. (NYSE:WS - Get Free Report)'s stock price gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $38.19, but opened at $36.19. Worthington Steel shares last traded at $34.9380, with a volume of 128,076 shares.

The company reported $0.57 earnings per share for the quarter, missing analysts' consensus estimates of $1.16 by ($0.59). Worthington Steel had a return on equity of 8.87% and a net margin of 0.50%.The business had revenue of $2.73 billion during the quarter, compared to analyst estimates of $3.14 billion. During the same period in the previous year, the business earned $0.77 EPS. The firm's revenue for the quarter was up 212.4% compared to the same quarter last year.

Worthington Steel Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Monday, December 28th. Stockholders of record on Monday, December 14th will be paid a dividend of $0.16 per share. The ex-dividend date is Monday, December 14th. This represents a $0.64 dividend on an annualized basis and a dividend yield of 1.8%. Worthington Steel's payout ratio is presently 46.04%.

More Worthington Steel News

Here are the key news stories impacting Worthington Steel this week:

• Positive Sentiment: Quarterly dividend maintained: Worthington Steel declared a quarterly dividend of $0.16 per share, payable December 28 to shareholders of record December 14. The $0.64 annualized payout represents a yield of approximately 1.7% and signals continued shareholder distributions. Worthington Steel Declares Quarterly Dividend
• Positive Sentiment: Klöckner agreement: The company announced an agreement intended to advance its control of Klöckner, a strategic development that could support operational integration and long-term growth, although the available report provides limited financial detail. Worthington Steel Advances Control With Klöckner Agreement
• Neutral Sentiment: Revenue increased sharply: Fiscal Q1 revenue reached $2.73 billion, up 212.4% from the prior-year period, but still below the $3.14 billion analyst consensus. The large year-over-year increase may reflect portfolio or transaction-related changes, while the miss raises questions about demand and execution. Worthington Steel Fiscal Q1 Adjusted Earnings Fall, Revenue Rises
• Negative Sentiment: Significant earnings miss: Adjusted EPS was $0.57, down from $0.77 a year earlier and well below the $1.16 consensus estimate. The $0.59-per-share miss, along with a reported net margin of only 0.50%, is the main reason investors are reacting negatively to the results. Worthington Steel Falls Short on Q1 Earnings Estimates

Analyst Ratings Changes

Several research firms have weighed in on WS. KeyCorp reissued an "overweight" rating on shares of Worthington Steel in a research report on Tuesday. Wall Street Zen lowered shares of Worthington Steel from a "buy" rating to a "hold" rating in a report on Sunday, July 12th. Zacks Research downgraded Worthington Steel from a "strong-buy" rating to a "hold" rating in a research report on Thursday, September 17th. Finally, Weiss Ratings lowered Worthington Steel from a "hold (c)" rating to a "hold (c-)" rating in a research note on Monday, August 3rd. One analyst has rated the stock with a Buy rating and two have given a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and an average target price of $46.00.

Hedge Funds Weigh In On Worthington Steel

Several institutional investors and hedge funds have recently modified their holdings of the stock. Rockefeller Capital Management L.P. grew its holdings in Worthington Steel by 1,239.3% during the fourth quarter. Rockefeller Capital Management L.P. now owns 750 shares of the company's stock worth $26,000 after acquiring an additional 694 shares during the period. Public Employees Retirement System of Ohio purchased a new position in Worthington Steel during the second quarter valued at approximately $51,000. OP Asset Management Ltd acquired a new position in Worthington Steel in the first quarter valued at approximately $49,000. Security National Bank of SO Dak acquired a new position in Worthington Steel in the second quarter valued at approximately $111,000. Finally, Moran Wealth Management LLC purchased a new stake in Worthington Steel in the 1st quarter worth approximately $244,000. Institutional investors and hedge funds own 45.41% of the company's stock.

Worthington Steel Trading Down 8.8%

The firm has a market cap of $1.77 billion, a PE ratio of 25.18 and a beta of 2.24. The company has a 50-day simple moving average of $35.68 and a 200 day simple moving average of $36.33. The company has a current ratio of 1.46, a quick ratio of 0.92 and a debt-to-equity ratio of 0.04.

Worthington Steel Company Profile

Worthington Steel, Inc is a steel processing company that produces value-added flat-rolled steel products for manufacturers in the automotive, construction, energy, industrial and consumer markets. Its offerings include electrical steel, laser-welded and tailor-welded blanks, and other processed steel products designed to meet specific customer requirements.

The company provides services such as slitting, blanking, cold reduction, welding and other steel processing capabilities. Its products are used in applications including automotive components, electrical motors and transformers, building products, pressure vessels and industrial equipment.

Worthington Steel was separated from Worthington Industries as an independent public company in December 2023.

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