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Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.02 in third-quarter fiscal 2024 (ended May 31, 2024), beating the Zacks Consensus Estimate of $1.00. However, the bottom line fell 48.5% year over year.
Net sales in the reported quarter came in at $2.08 billion compared with the year-ago quarter’s $2.34 billion. The reported figure surpassed the Zacks Consensus Estimate of $2 billion.
The cost of goods sold in the quarter fell 6.7% year over year to $1.74 billion. The gross profit declined 29.5% year over year to $340 million during this period. The core EBITDA was $256 million in the fiscal third quarter, down 33.4% year over year.
Commercial Metals Company Price, Consensus and EPS Surprise
The North America Steel Group segment generated net sales of $1.67 billion in the fiscal third quarter compared with $1.82 billion in the year-ago quarter. We expected net sales of $1.6 billion for the quarter. The segment registered an adjusted EBITDA of around $246.3 million compared with the year-ago quarter’s $367.6 million. Our model predicted an adjusted EBITDA of $224 million.
The Europe Steel Group segment’s revenues were $209 million, down 36.9% from the year-ago quarter. Our model predicted net sales of $239 million. The adjusted EBITDA was a negative $4.2 million in the fiscal third quarter against the year-ago quarter’s positive $5.8 million. We expected an adjusted EBITDA of a negative $0.1 million for the quarter.
The Emerging Businesses Group segment generated net sales of $188.6 million in the fiscal third quarter compared with $189 million in the year-ago quarter. We expected net sales of $162 million for the quarter. The segment registered an adjusted EBITDA of $38 million, flat year over year. Our model predicted an adjusted EBITDA of $30 million.
Financials
Commercial Metals reported cash and cash equivalents of $698 million at the end of third-quarter fiscal 2024 compared with $592 million at the end of fiscal 2023. The company’s long-term debt came in at $1.14 billion at the end of the fiscal third quarter compared with $1.11 billion at the fiscal 2023 end. Cash generated from operating activities was $548 million for the nine months ended May 31, 2024, compared with $935 million in the prior-year comparable period.
On Jun 19, the company declared a quarterly dividend of 18 cents per share. The dividend will be paid out on Jul 10 to shareholders of record as of Jul 1, 2024.
Outlook
The company expects the fiscal fourth-quarter performance to be consistent with that witnessed in the fiscal third quarter.
Finished steel shipments within the North America Steel Group are expected to be flat sequentially. The segment's adjusted EBITDA margin is expected to be consistent with the fiscal third-quarter reported level. CMC expects the financial performance of the Emerging Businesses Group to improve marginally in the fiscal fourth quarter, owing to stable underlying market fundamentals and a solid order book.
Even though market conditions in Europe are projected to be challenging, the company anticipates Europe Steel Group adjusted EBITDA to continue to rise on a quarterly basis.
Price Performance
CMC shares have gained 12.1% in the past year compared with the industry’s growth of 1.8%.
L.B. Foster Company (FSTR - Free Report) is expected to release its second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at 42 cents for the second quarter, suggesting growth of 31.2% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $137 million, indicating a year-over-year decrease of 7.2%.
Gerdau S.A. (GGB - Free Report) is expected to release second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at 17 cents for the second quarter, suggesting a decline of 15% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $3.32 billion, indicating a year-over-year decrease of 10.1%.
Ternium S.A. (TX - Free Report) is expected to release second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.54 for the fiscal second quarter, suggesting a decline of 51.7% from the year-ago reported figure. The Zacks Consensus Estimate for the total revenues is pinned at $4.8 billion, indicating a year-over-year increase of 24.5%.
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Commercial Metals (CMC) Q3 Earnings Beat, Sales Dip Y/Y
Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.02 in third-quarter fiscal 2024 (ended May 31, 2024), beating the Zacks Consensus Estimate of $1.00. However, the bottom line fell 48.5% year over year.
Net sales in the reported quarter came in at $2.08 billion compared with the year-ago quarter’s $2.34 billion. The reported figure surpassed the Zacks Consensus Estimate of $2 billion.
The cost of goods sold in the quarter fell 6.7% year over year to $1.74 billion. The gross profit declined 29.5% year over year to $340 million during this period. The core EBITDA was $256 million in the fiscal third quarter, down 33.4% year over year.
Commercial Metals Company Price, Consensus and EPS Surprise
Commercial Metals Company price-consensus-eps-surprise-chart | Commercial Metals Company Quote
Segment Performance
The North America Steel Group segment generated net sales of $1.67 billion in the fiscal third quarter compared with $1.82 billion in the year-ago quarter. We expected net sales of $1.6 billion for the quarter. The segment registered an adjusted EBITDA of around $246.3 million compared with the year-ago quarter’s $367.6 million. Our model predicted an adjusted EBITDA of $224 million.
The Europe Steel Group segment’s revenues were $209 million, down 36.9% from the year-ago quarter. Our model predicted net sales of $239 million. The adjusted EBITDA was a negative $4.2 million in the fiscal third quarter against the year-ago quarter’s positive $5.8 million. We expected an adjusted EBITDA of a negative $0.1 million for the quarter.
The Emerging Businesses Group segment generated net sales of $188.6 million in the fiscal third quarter compared with $189 million in the year-ago quarter. We expected net sales of $162 million for the quarter. The segment registered an adjusted EBITDA of $38 million, flat year over year. Our model predicted an adjusted EBITDA of $30 million.
Financials
Commercial Metals reported cash and cash equivalents of $698 million at the end of third-quarter fiscal 2024 compared with $592 million at the end of fiscal 2023. The company’s long-term debt came in at $1.14 billion at the end of the fiscal third quarter compared with $1.11 billion at the fiscal 2023 end. Cash generated from operating activities was $548 million for the nine months ended May 31, 2024, compared with $935 million in the prior-year comparable period.
On Jun 19, the company declared a quarterly dividend of 18 cents per share. The dividend will be paid out on Jul 10 to shareholders of record as of Jul 1, 2024.
Outlook
The company expects the fiscal fourth-quarter performance to be consistent with that witnessed in the fiscal third quarter.
Finished steel shipments within the North America Steel Group are expected to be flat sequentially. The segment's adjusted EBITDA margin is expected to be consistent with the fiscal third-quarter reported level. CMC expects the financial performance of the Emerging Businesses Group to improve marginally in the fiscal fourth quarter, owing to stable underlying market fundamentals and a solid order book.
Even though market conditions in Europe are projected to be challenging, the company anticipates Europe Steel Group adjusted EBITDA to continue to rise on a quarterly basis.
Price Performance
CMC shares have gained 12.1% in the past year compared with the industry’s growth of 1.8%.
Image Source: Zacks Investment Research
Zacks Rank
Commercial Metals currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Steel - Producers Stocks Awaiting Results
L.B. Foster Company (FSTR - Free Report) is expected to release its second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at 42 cents for the second quarter, suggesting growth of 31.2% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $137 million, indicating a year-over-year decrease of 7.2%.
Gerdau S.A. (GGB - Free Report) is expected to release second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at 17 cents for the second quarter, suggesting a decline of 15% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $3.32 billion, indicating a year-over-year decrease of 10.1%.
Ternium S.A. (TX - Free Report) is expected to release second-quarter 2024 results soon.
The Zacks Consensus Estimate for the company’s earnings per share is pegged at $1.54 for the fiscal second quarter, suggesting a decline of 51.7% from the year-ago reported figure. The Zacks Consensus Estimate for the total revenues is pinned at $4.8 billion, indicating a year-over-year increase of 24.5%.