Worthington Steel, Inc. (WS) Q1 2026 Earnings Call Transcript
Adjusted EBITDA $75.2 million, reflecting disciplined execution in a soft market and year-over-year volume growth.
Earnings per share (EPS) $0.72, up from $0.56 in the prior year quarter, driven by higher gross margin and increased equity earnings.
Net sales $872.9 million, up 5% year-over-year, primarily due to the addition of Sitem and higher direct volume, partially offset by lower selling prices and toll volumes.
Gross margin Increased by $14.8 million year-over-year, primarily due to higher direct material spreads and direct volumes, partially offset by lower toll processing gross margin.
Direct sales volume Increased by 6% year-over-year, with the majority of the increase coming from existing facilities and the addition of Sitem.
Toll processing volumes Decreased by 22% year-over-year due to softer market conditions, facility closure, and customer program changes.
Automotive shipments Increased by 17% year-over-year, driven by new programs and increased volumes for Detroit 3 OEM customers.
Agricultural market shipments Decreased by nearly 50% year-over-year, reflecting continued softness in the agricultural equipment market.
Heavy truck market shipments Decreased by 7% year-over-year, but partially offset by new business in the market.
Free cash flow $34 million outflow, impacted by increases in working capital and $29 million in capital expenditures.
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Micron Technology (MU) to Acquire Taiwanese Chip Fab for $1.8B
- Acquisition Announcement: Micron Technology has announced plans to acquire a chip fabrication site in Taiwan for $1.8 billion in cash, which will enhance its production capabilities in the global semiconductor market, particularly in AI and high-performance computing.
- Market Consolidation: TransDigm has agreed to acquire Jet Parts Engineering and Victor Sierra Aviation Holdings for approximately $2.2 billion in cash, further solidifying its leadership position in the aerospace parts market, which is expected to boost its revenue and market share.
- Steel Industry Restructuring: Worthington Steel announced the acquisition of metal processing firm Kloeckner & Co. for $2.4 billion, which is expected to make it the second-largest steel service center in North America, significantly enhancing its competitive position in the market.
- Potential Merger: Coterra Energy is in talks with Devon Energy about a potential merger, which, if completed, would rank among the largest oil and gas deals in years, potentially reshaping the industry landscape and enhancing the market positions of both companies.
Worthington Steel (WS) Enters Acquisition Agreement with Kloeckner & Co, Shares Surge 6.9%
- Acquisition Agreement: Worthington Steel Inc has entered into a Business Combination Agreement with Kloeckner & Co, planning a voluntary public offer to acquire all outstanding shares at €11 per share ($12.8), with management support and existing leadership expected to remain post-closing, thereby enhancing the company's market position and future growth potential.
- Stock Surge: Following the acquisition announcement, Worthington Steel's shares jumped 6.9% to $41.43, reflecting positive market expectations and increased investor confidence, which may provide financial support for the company's future developments.
- Industry Dynamics: On the same trading day, Kopin Corp shares rose 17.1% to $3.46, and ImmunityBio Inc shares increased by 17% to $4.62, indicating strong demand in the biotech and manufacturing sectors, potentially creating more investment opportunities for related companies.
- Positive Market Reaction: The overall market showed mixed performance, with the Nasdaq Composite gaining around 100 points, demonstrating continued investor interest and confidence in tech stocks, which may create a favorable market environment for Worthington Steel's acquisition plans.
