Worthington Enterprises (WOR, Financial) just dropped a surprise gift for investors: better-than-expected fiscal Q2 results that sent its stock soaring 16.4% in premarket trading to nearly $44.5. The building and consumer-products company, best known for brands like Coleman and Bernzomatic, pulled off an adjusted earnings win at $0.60 per share—15.4% above analyst predictions. Revenue hit $274 million, right on target, but down 8% year-over-year thanks to a strategic divestiture in its energy segment. CEO Joe Hayek credited the solid quarter to cost discipline and growth in EBITDA, even as macroeconomic challenges lingered.
Digging deeper, Worthington's Building Products division was the MVP, scoring a 4% sales boost powered by its acquisition of Hexagon Ragasco, a liquid gas cylinder maker. Meanwhile, Consumer Products stumbled slightly, with a 2.2% sales dip, but gross margins flexed upward thanks to lower costs. The numbers tell a story of a company leveraging smart acquisitions and operational tweaks to steady its footing. However, Worthington's 1.3% operating margin and a two-year revenue decline of 53.9% remind investors of the uphill battle this industrial player still faces in a choppy market.
So, is Worthington a buy? It's a mixed bag. Analysts expect revenue to dip 1% over the next year—better than recent trends but hardly a turnaround. Yet, with the stock bouncing back from a third of its losses this year and free cash flow margins climbing to 12.4%, Worthington's resilience is hard to ignore. For investors eyeing the industrials sector, Worthington's strategic pivots and cost controls offer a glimmer of opportunity in a tough climate. Keep it on your radar.
