Worthington Industries, Inc.’s ( WOR - Snapshot Report ) earnings for fiscal fourth quarter 2012 were 75 cents per share, comfortably surpassing the Zacks Consensus Estimate of 54 cents. Results improved 7% from the year ago quarter of 70 cents per share.

Operational Update

Total revenue in the quarter increased 12% to $755.4 million beating the Zacks Consensus Estimate of $682 million. The improvement stemmed largely from acquisitions, higher volumes and average selling prices in Pressure Cylinders, partially offset by negative impact of deconsolidation transactions.

Cost of goods sold rose 14% to $634 million in the quarter. Gross margin improved 2% to $121.5 million.

SG&A expenses increased 4.3% to $64.3 million. Operating income fell 4.7% to $59.5 million during the quarter. This included the net gains of $2.3 million in the quarter and $4.8 million in the prior year quarter, pertaining to the impact of impairments, restructuring charges and the joint venture transactions. Excluding these items, adjusted operating income (excluding one time gains) was $57.2 million in the reported quarter compared to $57.5 million in the year ago quarter.

Fiscal 2012 Performance

For the full year 2012, Worthington reported earnings of $1.65 per share, exceeding the Zacks Consensus Estimate of $1.49. Total revenues improved 4% year over year to $2,534.7 million, ahead of the Zacks Consensus Estimate of $4,461 million. The growth in the top-line largely stemmed from added sales from acquisitions, volume growth in Steel Processing and higher overall average selling prices, partially offset by negative impact of deconsolidation of Metal Framing and Automotive Body Panels segments.

Segment Performance

Total revenue in the Steel Processing segment fell marginally to $429.6 million. Volumes improved 2.8% to 797 tons during the quarter. Revenues fell as the volume growth was more than offset by lower average selling prices.

Pressure Cylinders segment’s total revenues increased 28.9% to $236.8 million. Volumes increased 45.8% to 24,011 tons in the reported quarter. Improvement in revenues was attributable to recent acquisitions and a favorable sales mix resulting in higher average selling prices.

During the quarter, Engineered Cabs segment reported total revenues of $64.1 million.

Financial Position

Cash and cash equivalents were $41.0 million as of May 31, 2012, compared with $56.2 million as of May 31, 2011. Long-term debt increased to $257.5 million at the end of May 31, 2012, compared with $250.3 million at the end of May 31, 2011. Cash provided by operating activities amounted to $36.7 million during the fourth-quarter 2012, compared to $16.6 million in the year-ago quarter.

Outlook

The company hopes to continue with earnings growth. It expects its core businesses to benefit from its growth strategies that include acquisitions coupled with expansion in product lines as well as market.

Our View

Worthington, may reap benefits from its core businesses and joint ventures which would eventually help the company in improving its growth prospects in the next few quarters. Demand is also expected to remain strong in all the segments. However, the construction market may remain constrained due to tight government spending.

Worthington competes with companies like AK Steel Holding Corporation ( AKS - Analyst Report ) and Gibraltar Industries, Inc. ( ROCK - Analyst Report ) . The stock retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on Worthington.