Worthington Industries reported net earnings of $52.1mn for the second quarter of its fiscal year 2020, and while it forecasts steady markets, it anticipates a languid Europe.
The company’s quarterly net earnings benefitted from $23.1mn in pre-tax gains. While it recorded $827.6mn in net sales in the second quarter of FY20, its estimated inventory holding losses in steel processing amounted to $6.5mn. During the second quarter of fiscal 2019, Worthington Industries reported $958.2mn in set sales and net earnings of $34mn. Its estimated inventory holding gains of $800,000 during the second quarter of FY19 were offset by pre-tax restructuring charges of $400,000.
John McConnel, chairman and chief executive officer of Worthington Industries, noted that challenging market conditions have affected steel prices, however, increased pressure cylinder sales—there was strong demand from its consumer products and oil and gas businesses—helped deliver strong results. Compared to the same quarter in FY19, McConnel pointed to annual earnings growth.
However, net sales for steel processing amounted to $516.9mn, down $118.1mn (19pc) from the second quarter during FY19, because of declining average selling prices and lower direct volume.
Pressure cylinders, too, recorded a decline during the second quarter of FY20 compared to the same quarter in FY19, with net sales totaling $290.1mn, down 1pc. The marginal decline has been attributed to the impact of divestitures and declining volumes in the company’s industrial products segment—although, as noted above, strong demand from consumer products and oil and gas mitigated the impact.
The company’s net sales during the second quarter of FY20 are down 14pc compared to the same quarter during its last fiscal year, largely because steel market prices and lower direct volumes have fallen.