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Commercial Metals (CMC) Q3 Earnings Surpass Estimates, Up Y/Y
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Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $2.61 in third-quarter fiscal 2022 (ended May 31, 2022), beating the Zacks Consensus Estimate of $2.09. The bottom line surged 151% year on year thanks to strong end-market demand and exceptional operational execution.
Including one-time items, the company achieved EPS of $2.54 in the fiscal third quarter compared with the prior-year quarter’s $1.07.
Net sales in the reported quarter came in at $2,516 million compared with the year-ago quarter’s $1,845 million. The reported figure surpassed the Zacks Consensus Estimate of $2,360 million.
The cost of goods sold in the quarter was up 28% year over year to $1,956 million. The gross profit was up 79% year over year to $559 million during this period. The core EBITDA was $484 million in the fiscal third quarter, up 110% year over year
Commercial Metals Company Price, Consensus and EPS Surprise
The North America segment generated net sales of $2,033 million in the fiscal third quarter compared with $1,558 million recorded in the prior-year quarter’s levels. The segment registered an adjusted EBITDA of $379 million compared with the year-earlier quarter’s $207 million.
The Europe segment’s revenues came in at $485 million, surging 71% year over year. The adjusted EBITDA was $121 million in the fiscal third quarter compared with the year-ago quarter’s $50 million.
Financials
Commercial Metals reported cash and cash equivalents of $410 million at the end of third-quarter fiscal 2022 compared with $498 million recorded at the end of fiscal 2021. The company’s long-term debt came in at $1,115 million at the end of the fiscal third quarter compared with $1,015 million at the fiscal 2021-end. Cash generated from operating activities was $242 million for the nine months period ended on May 31, 2022, compared with $94 million in the comparable period last year.
On Jun 15, the company declared a quarterly dividend of 14 cents per share. The dividend will be paid out on Jul 13 to shareholders of record as of Jun 29, 2022. This represents year-over-year dividend growth of 17%.
Outlook
Commercial Metals expects sustained robust demand for each of the company’s major product lines in the fiscal fourth quarter, driven by the company’s growing downstream backlog and increased levels of new work entering the project pipeline. Margins over scrap in North America and Europe are likely to maintain fiscal third-quarter levels, owing to the favorable market scenario. The company will gain from continued strength in construction markets, stemming from high levels of contract backlog in fiscal 2023.
Business Update
In the fiscal third quarter, Commercial Metals completed the acquisition of Tensar Corporation. This buyout adds a highly-attractive new growth platform to the company, which will make it a unique provider of value-added reinforcement solutions for the domestic and international construction markets.
Price Performance
Commercial Metals’ shares have surged 18.7% in the past year against the industry’s decline of 10.2%.
Some other top-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Nutrien Ltd. (NTR - Free Report) and Albemarle Corporation (ALB - Free Report) .
Allegheny has a projected earnings growth rate of 869.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 27.3% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 15.6% in a year and currently sports a Zacks Rank #1.
Nutrien has a projected earnings growth rate of 163.2% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 27.5% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 42.9% in a year. The company flaunts a Zacks Rank #1.
Albemarle has a projected earnings growth rate of 203.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 100.4% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has gained 46.5% in a year. The company sports a Zacks Rank #1.
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Commercial Metals (CMC) Q3 Earnings Surpass Estimates, Up Y/Y
Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $2.61 in third-quarter fiscal 2022 (ended May 31, 2022), beating the Zacks Consensus Estimate of $2.09. The bottom line surged 151% year on year thanks to strong end-market demand and exceptional operational execution.
Including one-time items, the company achieved EPS of $2.54 in the fiscal third quarter compared with the prior-year quarter’s $1.07.
Net sales in the reported quarter came in at $2,516 million compared with the year-ago quarter’s $1,845 million. The reported figure surpassed the Zacks Consensus Estimate of $2,360 million.
The cost of goods sold in the quarter was up 28% year over year to $1,956 million. The gross profit was up 79% year over year to $559 million during this period. The core EBITDA was $484 million in the fiscal third quarter, up 110% 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 segment generated net sales of $2,033 million in the fiscal third quarter compared with $1,558 million recorded in the prior-year quarter’s levels. The segment registered an adjusted EBITDA of $379 million compared with the year-earlier quarter’s $207 million.
The Europe segment’s revenues came in at $485 million, surging 71% year over year. The adjusted EBITDA was $121 million in the fiscal third quarter compared with the year-ago quarter’s $50 million.
Financials
Commercial Metals reported cash and cash equivalents of $410 million at the end of third-quarter fiscal 2022 compared with $498 million recorded at the end of fiscal 2021. The company’s long-term debt came in at $1,115 million at the end of the fiscal third quarter compared with $1,015 million at the fiscal 2021-end. Cash generated from operating activities was $242 million for the nine months period ended on May 31, 2022, compared with $94 million in the comparable period last year.
On Jun 15, the company declared a quarterly dividend of 14 cents per share. The dividend will be paid out on Jul 13 to shareholders of record as of Jun 29, 2022. This represents year-over-year dividend growth of 17%.
Outlook
Commercial Metals expects sustained robust demand for each of the company’s major product lines in the fiscal fourth quarter, driven by the company’s growing downstream backlog and increased levels of new work entering the project pipeline. Margins over scrap in North America and Europe are likely to maintain fiscal third-quarter levels, owing to the favorable market scenario. The company will gain from continued strength in construction markets, stemming from high levels of contract backlog in fiscal 2023.
Business Update
In the fiscal third quarter, Commercial Metals completed the acquisition of Tensar Corporation. This buyout adds a highly-attractive new growth platform to the company, which will make it a unique provider of value-added reinforcement solutions for the domestic and international construction markets.
Price Performance
Commercial Metals’ shares have surged 18.7% in the past year against the industry’s decline of 10.2%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Commercial Metals currently flaunts a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the basic materials space are Allegheny Technologies Inc. (ATI - Free Report) , Nutrien Ltd. (NTR - Free Report) and Albemarle Corporation (ALB - Free Report) .
Allegheny has a projected earnings growth rate of 869.2% for the current year. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 27.3% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 128.9%, on average. ATI has gained around 15.6% in a year and currently sports a Zacks Rank #1.
Nutrien has a projected earnings growth rate of 163.2% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 27.5% upward in the past 60 days.
Nutrien’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 5.8%. NTR has gained 42.9% in a year. The company flaunts a Zacks Rank #1.
Albemarle has a projected earnings growth rate of 203.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 100.4% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has gained 46.5% in a year. The company sports a Zacks Rank #1.