Worthington Enterprises Shares Surge as Data-Center Cooling Demand Lifts Earnings

Shares of Worthington Enterprises, the Columbus, Ohio-based industrial manufacturer, jumped as much as 15% on Wednesday after the company reported fiscal first-quarter results that showed accelerating demand for the steel tanks it makes for liquid-cooling systems used in artificial-intelligence data centers.

The company said net sales for the quarter ended August 31 rose 13% from a year earlier to $343.9 million, with 7 percentage points of that growth coming from existing operations and the rest from recent acquisitions, according to results filed with the Securities and Exchange Commission. Adjusted earnings per share came in at 82 cents, ahead of the roughly 75 cents Wall Street had expected, while earnings per share on a fully diluted basis rose to 87 cents from 70 cents a year earlier. Adjusted EBITDA increased 10% to $74 million.

Cash flow nearly doubles

Free cash flow nearly doubled to $54 million from $27.9 million in the same period last year, driven by higher earnings and improved working-capital management, the company said in its earnings release. Worthington used part of that cash to repurchase 335,000 shares for $18.2 million during the quarter and declared a quarterly dividend of 20 cents per share, payable in late December.

The two reporting segments both posted higher sales. Building Performance Solutions, which includes water systems and building-products brands, grew net sales 16% to $215.1 million, while Trade & Specialty Solutions, which houses consumer and specialty-gas brands, grew 8% to $128.8 million with adjusted EBITDA margin expanding to 18.6% from 13.6% a year earlier.

A small business unit draws outsized attention

The figure that drew the most investor interest was narrower: revenue from Worthington's engineered ASME pressure tanks, which are increasingly built into liquid-cooling loops that keep AI server racks from overheating, reached $13 million in the quarter alone — equal to what the product line generated in all of the prior fiscal year combined. Chief Executive Joe Hayek told analysts on the earnings call that management expects the business to keep growing sequentially through the rest of the fiscal year and views the addressable liquid-cooling market as potentially many times larger than the legacy tank business it grew out of.

The reaction illustrates how directly AI infrastructure spending is now reaching companies well outside the semiconductor and cloud-computing names that have dominated the theme. Worthington, a more than 70-year-old maker of propane cylinders and steel building components, is a supplier several steps removed from chipmakers or hyperscale operators, yet its stock moved on a single product line that remains a small fraction of overall revenue. That reflects how investors are scanning industrial and building-products companies for exposure to data-center construction as hyperscalers continue to expand capacity for AI workloads.

Worthington's board also set an investor day for November 10 in New York, where executives are expected to lay out more detail on capital allocation and the liquid-cooling opportunity. The company's next scheduled report, covering its fiscal second quarter, is expected in December.

Shares of Worthington, which trades on the New York Stock Exchange under the ticker WOR, had already climbed this year alongside a broader rally in industrial names tied to AI infrastructure buildout before Wednesday's earnings-driven jump added to those gains. Net earnings for the quarter rose 22% to $42.6 million, and operating cash flow more than doubled to $66.7 million from $41.1 million a year earlier, underscoring the scale of the swing in the company's underlying cash generation alongside the headline sales and earnings growth.