PREVIEW-Tumbling steel prices to weigh on Worthington's Q4

* What: Metals processor Worthington Industries Q4 results

* When: July 15, Wednesday

* Commercial construction & automotives weakness to weigh

* Cost cutting initiatives may continue

By Shradhha Sharma

BANGALORE, July 14 (Reuters) - A steep decline in steel prices and continued weakness in major end-markets like commercial construction and the auto industry will weigh on Worthington Industries Inc's (WOR.N) fourth-quarter results, analysts say.

"Earnings reports should remain weak across the board for steelmakers, service centers and metals," Goldman Sachs analyst Sal Tharani said in a note to clients.

Global steel prices have tumbled more than 70 percent in some regions since hitting their peak in mid-2008, as the economic downturn depressed demand in key consuming industries such as construction and automotives.

Worthington's larger peers Commercial Metals Co (CMC.N) and Schnitzer Steel Industries Inc (SCHN.O) have already posted losses for the quarter ended May 31, and warned of difficult domestic market conditions for the remainder of 2009. [ID:nBNG500058] [ID:nBNG438112].

MIXED ANALYST VIEWS

Earnings for the company, which shapes and processes flat-rolled steel for industrial customers, is expected to barely avoid reporting a loss with analysts' forecasts ranging from a meagre profit to a breakeven scenario to a loss.

Goldman's Tharani, who recently added the stock to his "Conviction Sell list" expects Worthington to report a loss of 10 cents a share, given the metal processor's exposure to commercial construction, which should pressure its earnings near-term.

"We see further significant deterioration in its metal framing segment due to falling demand and rising steel (input) costs. We recommend taking profits in WOR," Tharani said.

Worthington's metal framing segment makes components used in the commercial and residential construction markets, like steel studs and roof trusses.

"As long as the automobile industry and the construction industry are weak, they have got a big problem and they can only cut costs so much," Affiliated Research Group analyst Charles Bradford said by phone.

Bradford expects Worthington to report breakeven to a loss in the fourth quarter.