Investing.com -- Worthington Steel, Inc. (NYSE: WS) reported first-quarter fiscal 2027 results that fell short of analyst expectations, with shares declining 1.5% after hours on Wednesday following the announcement.
The metals processing company posted adjusted earnings per share of $0.57 for the quarter ended August 31, 2026, missing the analyst consensus of $0.68 by $0.11. Revenue surged 212% YoY to $2.73 billion from $872.9 million, driven primarily by the inclusion of Kloeckner & Co following the company's majority acquisition completed on June 3, 2026. Kloeckner contributed $1.77 billion to net sales in the quarter. The stock moved modestly lower on the earnings miss, though the decline was relatively contained.
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Excluding Kloeckner's impact, revenue increased 9% compared to the prior year quarter, driven by higher direct volumes and improved pricing. Direct tons sold increased 3% while direct selling prices rose 6%. Adjusted EBIT reached $78.5 million, up from $55.5 million in the prior year quarter. However, the company reported a net loss attributable to controlling interest of $7.0 million, or -$0.14 per diluted share, compared to net earnings of $36.8 million, or $0.73 per share, in the prior year quarter. The loss was impacted by approximately $43 million in inventory fair value step-up costs related to the Kloeckner acquisition.
"This quarter marks an important milestone for Worthington Steel as we report our first results including Kloeckner," said Geoff Gilmore, president and CEO. "The addition of Kloeckner significantly expands our capabilities and positions us as a more diversified metals processing and manufacturing company."
The company ended the quarter with total debt of $2.20 billion and cash of $248.2 million, resulting in net debt of $1.95 billion. Free cash flow was negative $69.0 million compared to negative $35.7 million in the prior year quarter. Worthington Steel declared a quarterly dividend of $0.16 per share, payable December 28, 2026.
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