
Worthington Tops Street; Shares Surge
COLUMBUS, Ohio (TheStreet) -- Shares of steel-products maker Worthington Industries (WOR) - Get Report shot higher by as much as 15% Wednesday morning after the company easily exceeded Wall Street profit targets for its fiscal second quarter.
Early in Wednesday's session, Worthington shares were changing hands at $15.77, up $1.88, or 13.5%, on heavy volume.
Before the opening bell Wednesday, the company said it earned $23.2 million in the quarter, or 29 cents a share, while analysts were expecting 9 cents a share. Revenue, however, came in below estimates at $448 million, compared with Wall Street targets of a little less than $460 million.
A year ago, the company lost $2.02 a share on revenue of $745 million after taking huge write-downs, goodwill impairments and restructuring charges. With about 25% of its revenue derived from steel products sold to the auto industry, Worthington had been hit hard by the collapse of Detroit.
A year later, with a widely anticipated rebound in the auto industry seemingly developing (at least among certain car markers), investors appear to be looking forward to an uptick in demand for the flat steel produced by Worthington and other manufacturers.
Still, Worthington's own outlook for the industry remained cautious. In a prepared statement, the company's chief, John McConnell, said that "historically low demand" still characterized the current business environment. "While we are generally optimistic about the gradual return of the economy, we do not believe we will know how quickly our markets will rebound until the end of the third quarter, at the earliest."
Meanwhile, a Goldman Sachs analyst upgraded Worthington stock to neutral from sell, citing improved pricing fundamentals. Still, the analyst, Sal Tharani, was himself cautious on the company. His stance was reflected in his six-month price target on Worthington stock, which he raised to $13 from $11 -- nearly 18% below the current level.
In a research note, Tharani noted that Worthington's metal-framing business, which sells products to the still-reeling non-residential construction industry, may well "remain a headwind and could even deteriorate further."
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.









