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Commercial Metals (CMC) Q4 Earnings Miss Estimates, Dip Y/Y
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Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.69 for fourth-quarter fiscal 2023 (ended Aug 31, 2023), missing the Zacks Consensus Estimate of $1.84. The bottom line fell 31% from the prior-year quarter’s $2.45.
Including one-time items, CMC reported an EPS of $1.56 in the quarter compared with the prior-year quarter’s $2.40.
Net sales in the reported quarter were $2,209 million compared with the year-ago quarter’s $2,407 million. The reported figure surpassed the Zacks Consensus Estimate of $2,096 million.
The cost of goods sold in the quarter was down 6.1% from the year-ago quarter’s reading to $1,784 million. The gross profit was down 16.3% from the year-ago quarter’s level to $425 million during this period. The core EBITDA was $340 million in the fiscal fourth quarter, down 18.9% from the year-ago quarter.
Commercial Metals Company Price, Consensus and EPS Surprise
The North America segment generated net sales of $1,902 million in the fiscal fourth quarter compared with $1,998 million in the prior-year quarter. Our model predicted net sales of $1,741 million for the quarter. The segment registered an adjusted EBITDA of $375 million compared with the year-earlier quarter’s $371 million. We predicted adjusted EBITDA to be $333 million.
The Europe segment’s revenues were $301 million, down 27% from the year-ago quarter’s figure. We predicted net sales of $280 million. The adjusted EBITDA was a negative $26 million in the fiscal fourth quarter against the year-ago quarter’s adjusted EBITDA of $64 million. Our model predicted an adjusted EBITDA of $32.8 million.
The variance was caused due to weakened market conditions in Europe during the quarter. Construction activity in Poland was down in the quarter, and industrial production in Central Europe remained poor.
FY23 Performance
Commercial Metals reported adjusted earnings per share of $7.40 for fiscal 2023, marking a 9.6% decline from the prior year’s $8.19. The bottom line missed the Zacks Consensus Estimate of $7.56. Including one-time items, EPS was $7.25 in fiscal 2023 compared with $9.95 in fiscal 2022. Revenues dropped 1.3% year over year to $8.79 billion in fiscal 2023, beating the Zacks Consensus Estimate of $8.69 billion.
Financials
Commercial Metals reported cash and cash equivalents of $592 million at the end of fiscal 2023 compared with $673 million at the end of fiscal 2022. CMC’s long-term debt was $1,114 million at the end of fiscal 2023 compared with $1,113 million at the fiscal 2022 end. Cash generated from operating activities was $1,344 million in fiscal 2023 compared with $700 million in the last fiscal year.
CMC repurchased shares worth $18.6 million in the quarter under review. As of Aug 31, 2023, $86.7 million remained under the current share buyback authorization.
Outlook
CMC anticipates the first-quarter fiscal 2024 consolidated financial performance to be solid by historical standards. It will, however, fall from the fourth quarter of fiscal 2023’s levels due to seasonally reduced shipments, steel product margin compression in North America and the ongoing market conditions in Europe. The Europe operations will likely receive $60 million from two big government rebate programs in the first quarter. Backed by these rebates, CMC expects a sequential improvement in the Europe segment’s adjusted EBITDA.
Price Performance
Shares of Commercial Metals have gained 5.3% in the past year compared with the industry’s growth of 42.1%.
Some other top-ranked stocks from the basic materials space are Yara International ASA (YARIY - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and L.B. Foster Company (FSTR - Free Report) . YARIY sports a Zacks Rank #1 at present, and CRS and FSTR carry a Zacks Rank #2 (Buy).
Yara International has an average trailing four-quarter earnings surprise of 56%. The Zacks Consensus Estimate for YARIY’s fiscal 2023 earnings is pegged at $1.27 per share. The consensus estimate for 2023 earnings has moved 9% north in the past 60 days. Its shares gained 5.2% in the last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.48 per share. The consensus estimate for 2023 earnings has moved 8% north in the past 60 days. Its shares gained 109.6% in the last year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares gained 98.4% in the last year.
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Commercial Metals (CMC) Q4 Earnings Miss Estimates, Dip Y/Y
Commercial Metals Company (CMC - Free Report) reported adjusted earnings per share (EPS) of $1.69 for fourth-quarter fiscal 2023 (ended Aug 31, 2023), missing the Zacks Consensus Estimate of $1.84. The bottom line fell 31% from the prior-year quarter’s $2.45.
Including one-time items, CMC reported an EPS of $1.56 in the quarter compared with the prior-year quarter’s $2.40.
Net sales in the reported quarter were $2,209 million compared with the year-ago quarter’s $2,407 million. The reported figure surpassed the Zacks Consensus Estimate of $2,096 million.
The cost of goods sold in the quarter was down 6.1% from the year-ago quarter’s reading to $1,784 million. The gross profit was down 16.3% from the year-ago quarter’s level to $425 million during this period. The core EBITDA was $340 million in the fiscal fourth quarter, down 18.9% from the year-ago quarter.
Commercial Metals Company Price, Consensus and EPS Surprise
Commercial Metals Company price-consensus-eps-surprise-chart | Commercial Metals Company Quote
Segmental Performance
The North America segment generated net sales of $1,902 million in the fiscal fourth quarter compared with $1,998 million in the prior-year quarter. Our model predicted net sales of $1,741 million for the quarter. The segment registered an adjusted EBITDA of $375 million compared with the year-earlier quarter’s $371 million. We predicted adjusted EBITDA to be $333 million.
The Europe segment’s revenues were $301 million, down 27% from the year-ago quarter’s figure. We predicted net sales of $280 million. The adjusted EBITDA was a negative $26 million in the fiscal fourth quarter against the year-ago quarter’s adjusted EBITDA of $64 million. Our model predicted an adjusted EBITDA of $32.8 million.
The variance was caused due to weakened market conditions in Europe during the quarter. Construction activity in Poland was down in the quarter, and industrial production in Central Europe remained poor.
FY23 Performance
Commercial Metals reported adjusted earnings per share of $7.40 for fiscal 2023, marking a 9.6% decline from the prior year’s $8.19. The bottom line missed the Zacks Consensus Estimate of $7.56. Including one-time items, EPS was $7.25 in fiscal 2023 compared with $9.95 in fiscal 2022. Revenues dropped 1.3% year over year to $8.79 billion in fiscal 2023, beating the Zacks Consensus Estimate of $8.69 billion.
Financials
Commercial Metals reported cash and cash equivalents of $592 million at the end of fiscal 2023 compared with $673 million at the end of fiscal 2022. CMC’s long-term debt was $1,114 million at the end of fiscal 2023 compared with $1,113 million at the fiscal 2022 end. Cash generated from operating activities was $1,344 million in fiscal 2023 compared with $700 million in the last fiscal year.
CMC repurchased shares worth $18.6 million in the quarter under review. As of Aug 31, 2023, $86.7 million remained under the current share buyback authorization.
Outlook
CMC anticipates the first-quarter fiscal 2024 consolidated financial performance to be solid by historical standards. It will, however, fall from the fourth quarter of fiscal 2023’s levels due to seasonally reduced shipments, steel product margin compression in North America and the ongoing market conditions in Europe. The Europe operations will likely receive $60 million from two big government rebate programs in the first quarter. Backed by these rebates, CMC expects a sequential improvement in the Europe segment’s adjusted EBITDA.
Price Performance
Shares of Commercial Metals have gained 5.3% in the past year compared with the industry’s growth of 42.1%.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Commercial Metals currently sports 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 from the basic materials space are Yara International ASA (YARIY - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and L.B. Foster Company (FSTR - Free Report) . YARIY sports a Zacks Rank #1 at present, and CRS and FSTR carry a Zacks Rank #2 (Buy).
Yara International has an average trailing four-quarter earnings surprise of 56%. The Zacks Consensus Estimate for YARIY’s fiscal 2023 earnings is pegged at $1.27 per share. The consensus estimate for 2023 earnings has moved 9% north in the past 60 days. Its shares gained 5.2% in the last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.48 per share. The consensus estimate for 2023 earnings has moved 8% north in the past 60 days. Its shares gained 109.6% in the last year.
L.B. Foster has an average trailing four-quarter earnings surprise of 134.5%. The Zacks Consensus Estimate for FSTR’s 2023 earnings is pegged at 53 cents per share. Earnings estimates have been unchanged in the past 60 days. FSTR’s shares gained 98.4% in the last year.