Worthington braces for auto shutdown impact

Production shutdowns by all US major automakers because of the spreading coronavirus pandemic will impact steel service center Worthington Industries in the coming quarter.

The company said automotive makes up 60pc of its steel processing and majority joint venture operations. Worthington's steel processing business, which typically performs at its peak during its fiscal fourth quarter which runs from 1 March through 31 May, will be negatively impacted by the auto plant shutdowns and closures by the original equipment manufacturers (OEMs) that supply them.

Worthington said while demand was strong so far through March, steep dropoffs are coming to the steel processing segment.

Steel processing volumes in the fiscal third quarter ended 29 February totaled 1.14mn short tons (st), an increase of 37pc compared to the same period of fiscal 2019.

Worthington also expects its pressure cylinders business to be impacted by the downturn in the oil and gas industry, where US prices have fallen by 54pc in the last month. Volumes for that segment in the third quarter fell by 18pc to 17.38mn units.

Worthington's third quarter earnings fell by 43pc to $15.3mn compared to the same period prior year.

By Rye Druzin