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Mixed Bag from Worthington, Profit Jumps

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Metal processor – Worthington Industries, Inc.’s (WOR - Free Report) earnings of 52 cents a share for third-quarter fiscal 2013 (ended Feb 28, 2013) beat the Zacks Consensus Estimate by 3 cents and exceeded the year-ago earnings of 37 cents. 

Profit shot up 43% year over year to $37.1 million, aided by healthy results from the company's pressure cylinders business. Both restructuring and joint venture transaction costs fell significantly in the reported quarter, thereby boosting the bottom line.  
Revenue edged up 1% year over year to $619.5 million but missed the Zacks Consensus Estimate of $677 million. Higher volumes aided by acquisitions were partly masked by lower average selling prices due to falling market price of steel.
Gross margin increased to 15.7% from 13.6% a year ago. Acquisitions and better product mix in pressure cylinders business contributed to the increase. 
Segment Highlights
Revenues in the core Steel Processing division fell 5% year over year to $349.6 million on lower pricing. Volumes fell 11% year over year to 636 units in the quarter.
Worthington’s Pressure Cylinders segment was the bright spot with revenues rising 9% year over year to $205.2 million, buoyed by the acquisition of leading atmospheric tanks and pressure vessels maker Westerman Companies. Volumes edged down 0.4% to 17,861 units. 
The Engineered Cabs segment, which consists of the operations of Angus Industries Inc. (acquired in late 2011), posted revenues of $48.6 million in the quarter. The division’s results were affected lower volumes due to production delays.
Financial Position
Worthington exited the quarter with cash and cash equivalents of $37.4 million, up 6% year over year. Long-term debt increased 61% year over year to $406.5 million. Operating cash flows decreased 58% year over year to $36.3 million.
Moving ahead, Worthington expects a favorable environment to support its results in the fourth quarter. The company remains committed to expand its capabilities in the energy market. Worthington will continue to explore additional opportunities for growth both organically and through new businesses.
Worthington is engaged in processing steel for application in the automotive, construction, hardware, agricultural, aerospace and other industries. The company makes a range of processed steel items, pressure cylinders (including oxygen and helium tanks and hand torches), metal framing products, racks, shipping pallets, airbrake tanks and consumer products. The company operates 80 facilities throughout 12 nations.
Worthington recently achieved the “Partner-Level Supplier” recognition for 2012 in the John Deere achieving excellence program. It is the highest supplier rating of Deere & Company (DE - Free Report) .
Worthington currently retains a Zacks Rank #2 (Buy).
Other metal processors worth considering are Kaydon Corporation and NSK Ltd. . Both hold a Zacks Rank #2 (Buy).

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