Ever wonder what happens to the steel that rolls out of the mills at places like Nucor (NYSE:NUE) or Chaparral (NASDAQ:CHAP)? A lot of it ends up with steel processors like Worthington (NYSE:WOR) (or competitors like Steel Technologies (NASDAQ:STTX)), where it is further processed, cut, and prepared for a host of steel-using customers in just about any industry you care to name.

As you might imagine, being a middleman can be a tricky situation, and Worthington didn't have a particularly strong fiscal third quarter this year. Revenues fell about 9%, with operating income dropping more than 53% as well.

Though shipment volume was lackluster, declining prices really hammered top-line results. In its operating profits, the company suffered through higher freight and energy costs, as well as higher costs for materials like zinc (used in galvanizing).

Looking at the company's business units, results were weakest in the steel-processing business, where revenue fell 15% and segment operating profits were cut to about one-third of the year-ago level. As you might imagine, the company isn't getting any juice right now from its automobile customers. About 10% of Worthington's sales go to the auto industry, but they're devoted almost solely to the Big Three: Ford (NYSE:F), General Motors (NYSE:GM), and DaimlerChrysler (NYSE:DCX).

Results were also weak in the metal-framing business (sales down 7%, operating income down about 61%), but at least there was some good news here. The company hiked prices 12% in early March and will hike them another 10% in mid-April, and it looks like competitors are going along with this (making the hikes more likely to stick). While it's still weak, the company's pressure-cylinder business did relatively better (sales down 2%, operating income down 6%).

I think business will probably improve, and Worthington has the capability to be a consolidator in the industry. But I also worry that companies like Nucor and Chaparral might ultimately hurt the steel-processing business. They're developing more in-house technologies (like Nucor's direct casting) that could replace some of what these processors do. Much as I like some of the steelmakers today, I'm not all that entranced by this stock.

For more metal mayhem:

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).