Commercial Metals (CMC) Tops Q3 EPS by 18c

Commercial Metals (NYSE: CMC) reported Q3 EPS of $0.59, $0.18 better than the analyst estimate of $0.41. Revenue for the quarter came in at $1.34 billion versus the consensus estimate of $1.38 billion.

• GAAP earnings per diluted share from continuing operations of $0.53 were unchanged sequentially, while adjusted earnings per diluted share from continuing operations of $0.59 increased 11%
• Gross margin increased 3% sequentially to $225.3 million
• Americas Mills metal margin rose $17 per ton sequentially; segment achieved best conversion cost in two years. Americas Fabrication generated highest quarterly adjusted EBITDA in nearly 12 years
• Generated cash from operations of $278 million, bringing year-to-date total to $532 million

Barbara R. Smith, Chairman of the Board, President and Chief Executive Officer, commented, "While the effects of the COVID-19 crisis impacted our business throughout the third quarter, CMC acted early and swiftly to ensure the safety of our employees, the continuity of our operations, and the uninterrupted service to our customers. Our entire organization can be proud of these efforts and their results. We were able to keep our workforce fully employed and safe. We also avoided any meaningful disruptions to operations and experienced no loss of productivity, while closely following CDC guidelines at all of our locations."

Ms. Smith continued, "In the face of unprecedented global uncertainty, we concentrated our focus on the elements of our business within our direct control. Because of these efforts, CMC achieved sequential earnings growth while increasing our market share in many products, continuing to reduce our operating costs, and further strengthening our balance sheet. Our success during the quarter underscores several of CMC's best qualities – a robust business model, focus on providing best-in-class customer service, and commitment to our employees."

Outlook

"We expect construction and infrastructure activity to remain resilient during our fiscal fourth quarter," said Ms. Smith. "Our finished product volumes are supported by strong fabrication backlogs, which stood near record-high levels at May 31. Customers' sentiment about their own summer construction workloads is also encouraging. CMC's net debt-to-EBITDA ratio of 1.2x and substantial cash and equivalents on hand give us great confidence in our ability to withstand these challenging times, and provide us with significant flexibility in our capital allocation decisions."

For earnings history and earnings-related data on Commercial Metals (CMC) click here.

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