Worthington Industries (WOR -0.64%) will release its quarterly report on Wednesday, and investors have to be pleased with the stock's performance, having sent shares to all-time record highs last month. What's even more surprising is that Worthington has succeed where steel producers U.S. Steel (X 0.85%) and ArcelorMittal (MT -0.08%) have largely failed, and Worthington earnings are expected to keep growing even as its peers are struggling to stay profitable.

The secret of Worthington's success has to do with its niche within the steel industry. Rather than focusing on the commodity side of the business, Worthington makes specialized products like pressurized cylinders for gas storage, platforms and pallets for shipping and product handling, and flat-rolled and stainless-steel processing services for industries including the automotive and aerospace sectors. Worthington counts Ford (F -0.90%) and General Motors (GM 1.23%) among its customers, and their success has undoubtedly helped Worthington as well. But can the good times last? Let's take an early look at what's been happening with Worthington over the past quarter and what we're likely to see in its report.

Stats on Worthington

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$692.92 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will Worthington earnings fare this quarter?
In recent months, analysts have gotten a bit more downbeat on Worthington earnings, cutting their August-quarter estimates by $0.03 per share and their full-year fiscal 2014 projections by about 3%. The stock has largely topped out, rising less than 1% since mid-June.

Worthington has faced its share of struggles lately, as its May-quarter earnings show. The company saw net income fall 36% on 7% lower revenue for the quarter, with Worthington pointing to both lower prices for its product sales and a reduction in overall volume of products sold. Impairment charges related to joint ventures in China and India as well as restructuring charges for two of its domestic facilities cut $0.14 per share off earnings for the quarter.

Yet Worthington has held up relatively well thanks to the recovery of Ford, General Motors, and Chrysler. Half of the sales from its Steel Processing segment comes from auto-related customers, and even though Worthington counts foreign automakers as customers, a big part of its auto-related sales come from the Big Three. Ford, GM, and Chrysler have all seen their own sales skyrocket recently, raising hopes that a full recovery for the auto industry is at hand. If that trend reverses, though, it could have a big impact on Worthington.

Worthington also hasn't been afraid to embrace joint ventures. It recently took majority control of its Tailor Welded Blanks joint venture, as former partner ThyssenKrupp sold its interest in the venture to China's Wuhan Iron & Steel in July. By focusing on areas of strength, Worthington can hopefully avoid the contractions that U.S. Steel and ArcelorMittal have seen in their businesses.

In the Worthington earnings report, watch for the company to comment further on its TWB venture and other strategic moves. If Worthington can keep moving forward, its shares could buck the steel industry's downbeat mood and keep climbing higher.

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