CMC shares rise 4% on fourth quarter earnings beat

Investing.com --On Thursday, Commercial Metals Company (NYSE: CMC) reported fourth quarter adjusted earnings per share of $2.09, exceeding analyst estimates of $1.96.

The steel and construction solutions provider’s shares gained 3.81% in pre-market trading following the results.

The company posted revenue of $2.65 billion, above the consensus estimate of $2.56 billion. Revenue increased 25.7% YoY from $2.11 billion in the prior year period.

The company reported net earnings of $212.5 million, or $1.91 per diluted share, up from $1.35 per share in the year-ago quarter. Consolidated core EBITDA rose 35.1% YoY to $393.7 million, with core EBITDA margin expanding 100 basis points to 14.8%.

"Our fourth quarter core EBITDA performance delivered solid year-over-year growth, driven by strong execution of our North American steel franchise and continued momentum of enterprise-wide TAG benefits," said Peter Matt, President and Chief Executive Officer.

The North America Steel Group posted adjusted EBITDA of $317.5 million, up 32.6% YoY, with adjusted EBITDA margin expanding to 16.4% from 14.8%. Metal margins increased $84 per ton to $652, while finished goods shipment volumes rose 5.3% YoY. Merchant bar shipment volumes surged 27.5% YoY.

The Construction Solutions Group reported net sales of $431.4 million, up 94.5% YoY, with adjusted EBITDA of $101.7 million, up 100.9%. However, precast operations fell below management expectations due to regional residential softness.

For the first quarter of fiscal 2027, CMC expects the North America Steel Group’s adjusted EBITDA to be nearly flat compared to the fourth quarter, as improved pricing largely offsets higher scrap costs and seasonal volume declines. The Construction Solutions Group is expected to see sequential adjusted EBITDA decline due to typical seasonal trends.

The company reduced net leverage adjusted for acquisitions to 1.9x, below its 2x target. CMC repurchased 383,333 shares valued at $26.7 million during the quarter and declared a quarterly dividend of $0.20 per share.

Original Article

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