Commercial Metals Company CMC reported adjusted earnings per share (EPS) of 26 cents in second-quarter fiscal 2025 (ended Feb. 28, 2025), missing the Zacks Consensus Estimate of 31 cents. The bottom line plunged 64% year over year from the prior-year quarter’s 73 cents.
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In the first quarter of fiscal 2024, CMC made an adjustment of $11.6 million for mill operational commissioning costs. CMC has decided that from the periods commencing after Feb. 29, 2024, it will no longer include any adjustment for mill operational commissioning costs. Accordingly, Commercial Metals recast adjusted earnings for the prior-year quarter to 73 cents. Including the adjustment, it previously stood at 88 cents.
Commercial Metals Company Price, Consensus and EPS Surprise
Commercial Metals Company Price, Consensus and EPS Surprise
Commercial Metals Company price-consensus-eps-surprise-chart | Commercial Metals Company Quote
Including one-time items, the company reported EPS of 22 cents in the fiscal second quarter compared with the year-ago quarter’s 73 cents.
CMC’s Revenues & Margins Dip Y/Y in Q2
Net sales in the reported quarter were $1.75 billion compared with the year-ago quarter’s $1.85 billion. The reported figure missed the Zacks Consensus Estimate of $1.77 billion.
The cost of goods sold in the quarter was down 1.1% year over year to $1.53 billion. The gross profit fell 25.9% year over year to $219 million during this period. The core EBITDA was $131 million in the fiscal second quarter, marking a year-over-year decline of 38.3%.
Commercial Metals’ Q2 Segmental Performance
The North America Steel Group segment generated net sales of $1.39 billion in the fiscal second quarter compared with $1.49 billion in the year-ago quarter. We expected net sales of $1.43 billion in the quarter. The segment registered an adjusted EBITDA of around $129 million compared with the year-ago quarter’s $222 million. Our model predicted an adjusted EBITDA of $120 million.
The Europe Steel Group segment’s revenues were $198 million, up 2.5% from the year-ago quarter. Our model predicted net sales of $166.5 million. The adjusted EBITDA was $0.75 million in the fiscal second quarter against the year-ago quarter’s negative $8.6 million. We expected an adjusted EBITDA of negative $8.2 million for the quarter.
The Emerging Businesses Group segment generated net sales of around $159 million in the fiscal second quarter compared with $156 million in the year-ago quarter. Our model predicted net sales of $174 million. The segment registered an adjusted EBITDA of $23.5 million compared with the year-ago quarter’s $18 million. Our model predicted an adjusted EBITDA of $13 million.
CMC’s Q2 Cash Flow & Balance Sheet Updates
Commercial Metals reported cash and cash equivalents of $758 million at the end of second-quarter fiscal 2025 compared with $858 million at the end of fiscal 2024. The company’s long-term debt was $1.15 billion at the end of the fiscal second quarter. Cash generated from operating activities was $245 million for the six months ended Feb. 28, 2025, compared with $350 million in the comparable period last year.
On March 19, the company declared a quarterly dividend of 18 cents per share. The dividend will be paid out on April 9 to shareholders of record as of March 31, 2025.
Commercial Metals’ Outlook
CMC expects its fiscal third-quarter results to rebound from the second-quarter level. Finished steel shipments within the North America Steel Group are expected to follow normal seasonal trends. The company expects the Group’s adjusted EBITDA margin to increase sequentially on higher margins over scrap on steel products.
For the Europe Steel Group segment, the company expects adjusted EBITDA to remain near breakeven.
Financial results for the Emerging Businesses Group are expected to be somewhat higher than the previous year’s actuals.
CMC Stock’s Price Performance
The company’s shares have lost 17.1% in the past year compared with the industry’s 16.2% fall.
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Commercial Metals’ Zacks Rank
CMC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of other Steel Producers Stocks
ArcelorMittal S.A. MT recorded adjusted earnings of 52 cents per share for fourth-quarter 2024 compared with $1.18 in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 41 cents.
MT’s revenues rose 1.1% year over year to $14.71 billion in the quarter. However, the figure missed the consensus estimate of $15.55 billion due to a decline in average steel selling prices.
Nucor Corporation NUE reported earnings of $1.22 per share for fourth-quarter 2024, down from $3.16 in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of 64 cents.
NUE recorded net sales of $7.07 billion, down 8.2% year over year. The figure beat the Zacks Consensus Estimate of $6,598 million. Earnings declined primarily due to lower prices.
National Steel SID reported a fourth-quarter 2024 loss per share of 8 cents, which was narrower than the Zacks Consensus Estimate of a loss of 9 cents. It reported earnings of 13 cents in the prior-year quarter.
For the December-end quarter, net sales were R$12 billion ($2.06 billion), up 0.2% year over year. The company incurred a net loss of R$85 million ($14.95 million) in the fourth quarter of 2024.
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