Worthington Industries Inc

Steel scrap prices have been stable over the last couple of months. This helped Steel Dynamics’ metal recycling operations post an operating profit in 2Q15.

An increase in building permits is positive for the US housing market. In May, building permits increased by an impressive 25.4% on a year-over-year basis.

The decline in China’s real estate climate index is an indicator that Chinese construction activity has slowed down. China’s real estate sector is a key driver of global steel demand.

Analysts track new home sales as an important housing industry indicator. New home sales increased an impressive 24.8% in February.

Worthington derives almost 40% of its revenue from the automotive industry. Considering how well the sector is doing, the outlook for Worthington is good.

WAVE and ClarkDietrich are Worthington’s two biggest joint ventures. Worthington also has a 50% stake in Serviacaro, a steel processor in Mexico.

Lower leverage ratios give Worthington a lot of opportunities to expand its business. The company’s cash flow is also in good shape.

Worthington earnings Previously in this series, we looked at some of Worthington Industries’s (WOR) major joint ventures, or JVs. These JVs serve the automobile, energy, and steel industries. Its oil and gas equipment sales grew 84% in 2Q 2015. Worthington’s fiscal year ends on May 31. Commercial Metals Company (CMC) runs its financial year from July to August. Oil […]

Mergers and acquisitions are an integral part of Worthington’s growth strategy. It has acquired 18 companies since 2009.

Higher operating costs at the Florence plant is one of the reasons why the Engineered Cabs segment was losing money. The plant is now closed.

The Pressure Cylinder segment supplies four major industries. Oil and gas equipment accounts for a quarter of this segment’s revenues.

Steel is Worthington Industries’ biggest segment, accounting for more than half of the company’s operating profits.

Worthington Industries was formed 60 years ago and is headquartered in Columbus, Ohio. It’s a leading value-added steel producer in the United States.

A low capacity utilization rate increases competition between existing industry players. This pressures steel prices as producers try to increase sales.

AK Steel expects to reduce its working capital and sell inventory in 2015. Its pension expenses will come down significantly in 2015, another positive sign.