Worthington Steel Inc (NYSE:WS) stock fell 8.37% (As on September 25, 11:27:15 AM UTC-4, Source: Google Finance) though the company beats market expectations for the first quarter of FY 26. Direct tons sold increased by 6%, of which the Sitem Group acquisition accounted for approximately 1% of the increase, and toll volumes decreased 22% in the first quarter of fiscal 2026 compared to the prior year quarter. The decrease in toll volumes was primarily related to softening demand from mill customers as well as lower volumes out of Worthington Samuel Coil Processing (“WSCP”) due to the closure of the toll processing manufacturing facility in Cleveland, Ohio. Direct selling prices increased 1% and toll selling prices decreased 3% in the first quarter of fiscal 2026 compared to the prior year quarter. The mix of direct tons versus toll tons processed was 63% to 37% in the first quarter of fiscal 2026 compared to 56% to 44% in the prior year quarter. Adjusted net earnings attributable to Worthington Steel of $38.9 million in the first quarter of fiscal 2026 compares to $28.4 million in the prior year quarter. As of August 31, 2025, the Company had cash and cash equivalents of $78.3 million. During the first quarter of fiscal 2026, net cash used in operating activities was $5.0 million compared to net cash provided by operating activities of $54.6 million in the prior year quarter. The Company had negative free cash flow of $34.4 million in the first quarter of fiscal 2026 compared to positive free cash flow of $33.1 million in the prior year quarter.

WS in the first quarter of FY 26 has reported the adjusted earnings per share of 77 cents, beating the analysts’ estimates for the adjusted earnings per share of 72 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 5 percent to $872.9 million in the first quarter of FY 26, beating the analysts’ estimates for revenue by 18.60%. The increase was driven primarily by higher direct volumes, and to a lesser extent, slightly higher average direct selling prices. The increases were partially offset by lower toll volumes as well as slightly lower average toll selling prices. Gross margin increased by $14.8 million over the prior year quarter to $115.2 million. Operating income increased $4.9 million from the prior year quarter to $48.3 million.