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Commercial Metals (CMC) Earnings & Sales Beat Estimates in Q2
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Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.53 in second-quarter fiscal 2022 (ended Feb 28, 2022), beating the Zacks Consensus Estimate of $1.28. The bottom line surged 132% year on year. Strong end-market demand and exceptional operational execution contributed to the upbeat results.
Including one-time items, the company achieved a record EPS of $3.12 in the fiscal second quarter compared with the prior-year quarter’s 54 cents.
Net sales in the reported quarter came in at $2,009 million compared with the year-ago quarter’s $1,462 million. The reported figure surpassed the Zacks Consensus Estimate of $1,857 million.
The cost of goods sold in the quarter was up 32% year over year to $1,615 million. The gross profit was up 68% year over year to $394 million during this period. The core EBITDA was $323 million in the fiscal second quarter, reflecting year-over-year growth of 89%.
Commercial Metals Company Price, Consensus and EPS Surprise
The North America segment generated net sales of $1,614 million in the fiscal second quarter compared with $1,257 million recorded in the prior-year quarter’s levels. The segment registered an adjusted EBITDA of $535 million compared with the year-earlier quarter’s $172 million.
The Europe segment’s revenues came in at $396 million, surging 96% year over year. The adjusted EBITDA was $81 million in the fiscal second quarter compared with the year-ago quarter’s $16 million.
Financials
Commercial Metals reported cash and cash equivalents of $847 million at the end of second-quarter fiscal 2022 compared with $498 million recorded at the end of fiscal 2021. The company’s long-term debt came in at $1,446 million at the end of the fiscal second quarter compared with $1,015 million at the fiscal 2021-end. Cash generated from operating activities was $54 million for the six months period ended on Feb 28, 2022, compared with $1.2 million in the comparable period last year.
On Mar 16, the company declared a quarterly dividend of 14 cents per share. The dividend will be paid out on Apr 13 to shareholders of record as of Mar 30, 2022.
Outlook
Commercial Metals expects robust demand for each of the company’s major product lines to sustain throughout the upcoming spring and summer construction season, driven by the company’s growing downstream backlog and increased levels of new work entering the project pipeline. Seasonal factors will continue to boost finished steel shipment volumes in third-quarter fiscal 2022.
Business Updates
In January, Commercial Metals entered into an agreement to acquire Tensar Corporation, which will make it a unique provider of value-added reinforcement solutions for the domestic and international construction markets. The deal is likely to close in the fiscal third quarter. The company also commissioned energy-efficient rebar and merchant bar-capable Arizona 2 micro mill project during the fiscal second quarter. Recently, CMC announced the construction of a micro mill in the Eastern United States.
Price Performance
Commercial Metals’ shares have gained 44.9% in the past year compared with the industry’s growth of 31.7%.
Some other top-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) , each sporting a Zacks Rank #1, at present.
Mosaic has a projected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised upward by 22.2% in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 3.7%. MOS has rallied around 87.3% in a year.
AdvanSix has a projected earnings growth rate of 30.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 25% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while missing once, the average surprise being 23.6%. ASIX has surged 57.3% in a year.
Allegheny has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised upward by 45.6% in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 127.2%. ATI has rallied around 21.3% over a year.
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Commercial Metals (CMC) Earnings & Sales Beat Estimates in Q2
Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.53 in second-quarter fiscal 2022 (ended Feb 28, 2022), beating the Zacks Consensus Estimate of $1.28. The bottom line surged 132% year on year. Strong end-market demand and exceptional operational execution contributed to the upbeat results.
Including one-time items, the company achieved a record EPS of $3.12 in the fiscal second quarter compared with the prior-year quarter’s 54 cents.
Net sales in the reported quarter came in at $2,009 million compared with the year-ago quarter’s $1,462 million. The reported figure surpassed the Zacks Consensus Estimate of $1,857 million.
The cost of goods sold in the quarter was up 32% year over year to $1,615 million. The gross profit was up 68% year over year to $394 million during this period. The core EBITDA was $323 million in the fiscal second quarter, reflecting year-over-year growth of 89%.
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 segment generated net sales of $1,614 million in the fiscal second quarter compared with $1,257 million recorded in the prior-year quarter’s levels. The segment registered an adjusted EBITDA of $535 million compared with the year-earlier quarter’s $172 million.
The Europe segment’s revenues came in at $396 million, surging 96% year over year. The adjusted EBITDA was $81 million in the fiscal second quarter compared with the year-ago quarter’s $16 million.
Financials
Commercial Metals reported cash and cash equivalents of $847 million at the end of second-quarter fiscal 2022 compared with $498 million recorded at the end of fiscal 2021. The company’s long-term debt came in at $1,446 million at the end of the fiscal second quarter compared with $1,015 million at the fiscal 2021-end. Cash generated from operating activities was $54 million for the six months period ended on Feb 28, 2022, compared with $1.2 million in the comparable period last year.
On Mar 16, the company declared a quarterly dividend of 14 cents per share. The dividend will be paid out on Apr 13 to shareholders of record as of Mar 30, 2022.
Outlook
Commercial Metals expects robust demand for each of the company’s major product lines to sustain throughout the upcoming spring and summer construction season, driven by the company’s growing downstream backlog and increased levels of new work entering the project pipeline. Seasonal factors will continue to boost finished steel shipment volumes in third-quarter fiscal 2022.
Business Updates
In January, Commercial Metals entered into an agreement to acquire Tensar Corporation, which will make it a unique provider of value-added reinforcement solutions for the domestic and international construction markets. The deal is likely to close in the fiscal third quarter. The company also commissioned energy-efficient rebar and merchant bar-capable Arizona 2 micro mill project during the fiscal second quarter. Recently, CMC announced the construction of a micro mill in the Eastern United States.
Price Performance
Commercial Metals’ shares have gained 44.9% in the past year compared with the industry’s growth of 31.7%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Commercial Metals currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) , each sporting a Zacks Rank #1, at present.
Mosaic has a projected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised upward by 22.2% in the past 60 days.
Mosaic beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 3.7%. MOS has rallied around 87.3% in a year.
AdvanSix has a projected earnings growth rate of 30.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 25% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while missing once, the average surprise being 23.6%. ASIX has surged 57.3% in a year.
Allegheny has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised upward by 45.6% in the past 60 days.
Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 127.2%. ATI has rallied around 21.3% over a year.