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# Worthington Steel Posts $7.0 Million Quarterly Loss As Kloeckner Deal Costs Outweigh Tripled Sales
- URL: https://www.bullished.co/worthington-steel-posts-7-0-million-quarterly-loss-as-kloeckner-deal-costs-outweigh-05427e4d/
- Published: 2026-10-07T10:50:59.000Z
- Updated: 2026-10-07T10:50:59.000Z
- Description: Sales rose 212% to $2,726.6 million with Kloeckner included, but acquisition expenses and fair-value charges produced a net loss versus a year-ago profit.
- Author: Matteo Parrino
- Tags: Deals, WS, Industry: Materials

Worthington Steel [lost $7.0 million](https://www.sec.gov/Archives/edgar/data/0001968487/000196848726000032/ws-ex99%5F1.htm?ref=bullished.co) attributable to controlling interest in its fiscal first quarter, or $0.14 a share, against net earnings of $36.8 million, or $0.73, a year earlier. The results, in an 8-K furnished with the company's earnings release, are the first to include Kloeckner, the German metals company in which it bought a majority stake.

## What the earnings release says

Net sales for the quarter ended August 31, 2026 were $2,726.6 million, [up 212%](https://sg.finance.yahoo.com/news/worthington-steel-falls-short-q1-210347210.html?ref=bullished.co) from $872.9 million. Kloeckner added $1,772.7 million of that. Without it, sales rose $81.0 million, or 9%, on higher direct volumes and, to a lesser extent, higher direct selling prices.

Operating income was $56.0 million versus $48.3 million. Adjusted earnings per share, which strips out one-time items, were [$0.57](https://sg.finance.yahoo.com/news/worthington-steel-falls-short-q1-210347210.html?ref=bullished.co) versus $0.77 a year earlier. Adjusted EBIT (earnings before interest and taxes) rose to $78.5 million from $55.5 million.

The reconciliation shows what separates the loss from the adjusted figure. Per share, Kloeckner acquisition-related expenses were $0.37 and a Kloeckner securities investment loss was $0.24\. A deferred tax asset adjustment added $0.11.

CEO Geoff Gilmore said the quarter "marks an important milestone" and that the core business "delivered solid operating performance, driven by higher direct volumes and improved pricing."

## Where the costs sit

Excluding Kloeckner, operating income fell $16.5 million. Selling, general and administrative costs rose $17.6 million, including an $18.6 million increase in professional fees tied mainly to the Kloeckner deal.

Kloeckner's gross margin was reduced by roughly $43 million of inventory fair-value step-up charges. The quarter also carried a $15.5 million remeasurement loss on the earlier Kloeckner stake.

Net debt, total debt less cash, was $1,948.2 million at August 31, 2026, versus $172.2 million at May 31, 2026, as acquisition financing took hold.

## Control of Kloeckner is not complete

Worthington completed settlement on June 3, 2026, securing about 62% of Kloeckner's shares. A delisting tender offer at €11.00 per share, begun July 15, ended August 12 and lifted the stake to about 62.11%.

On September 8 the company signed a Domination and Profit and Loss Transfer Agreement, which cannot take effect before January 1, 2027\. Until then, Kloeckner continues to operate independently, the company said.

The board also declared a quarterly dividend of $0.16 a share, payable December 28 to holders of record on December 14\. Shares closed at $38.19 on Tuesday, according to market data.

## What to watch

Kloeckner shareholders vote on the domination agreement at an October 23 meeting, per the investor presentation. Management plans to discuss its second-quarter outlook on Wednesday's 8:30 a.m. ET call.

The October 23 Kloeckner vote is the next dated step toward the operating control the company says it is seeking.

### Sources

- [8-K Filing — Worthington Steel, Inc. (WS)](https://www.sec.gov/Archives/edgar/data/0001968487/000196848726000032/ws-20261006.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit ws-ex99\_1.htm — Worthington Steel, Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001968487/000196848726000032/ws-ex99%5F1.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit ws-ex99\_2.htm — Worthington Steel, Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001968487/000196848726000032/ws-ex99%5F2.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit ws-ex99\_3.htm — Worthington Steel, Inc. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0001968487/000196848726000032/ws-ex99%5F3.htm?ref=bullished.co) — SEC EDGAR
- [Worthington Steel Swings to 1Q Loss Despite Kloeckner Acquisition Tripling Revenue](https://www.marketwatch.com/story/worthington-steel-swings-to-1q-loss-despite-kloeckner-acquisition-tripling-revenue-621cb521?ref=bullished.co) — MarketWatch
- [Worthington Steel falls short on Q1 earnings estimates, shares edge lower](https://sg.finance.yahoo.com/news/worthington-steel-falls-short-q1-210347210.html?ref=bullished.co) — Yahoo Finance