Back to top

Image: Bigstock

Commercial Metals (CMC) Earnings Beat Estimates in Q1, Up Y/Y

Read MoreHide Full Article

Commercial Metals Company (CMC - Free Report) reported first-quarter fiscal 2020 (ended Nov 30, 2019) adjusted earnings per share of 73 cents, beating the Zacks Consensus Estimate of 56 cents. The figure also surged 109% year over year. The company delivered stellar fiscal first-quarter results driven by continued growth in the U.S. non-residential construction sector, which contributed to strong performances in the Americas Mills and Fabrication segments.

Including one-time items, the company reported net income of 69 cents per share in the fiscal first quarter compared with the prior-year quarter’s 16 cents.

Net sales for the reported quarter increased 8% year over year to $1,385 million. However, the reported figure missed the Zacks Consensus Estimate of $1,446 million.

Cost of goods sold in the reported quarter improved around 2.5% year over year to $1,146 million. Gross profit surged 50% year over year to $239 million in the quarter. Core EBITDA was $174 million in the fiscal first quarter compared with the year-ago quarter’s $98 million.

Commercial Metals Company Price, Consensus and EPS Surprise

Financials

Commercial Metals exited the fiscal first quarter with cash and cash equivalents of $224.8 million compared with $192.4 million recorded at the end of fiscal 2019. The company’s long-term debt reduced to $1,179 million at the end of the quarter from $1,227 million recorded as of the end of fiscal 2019. Cash flow from operating activities were $146 million during the first quarter of fiscal 2020 compared with cash usage of $357 million in the prior quarter.

On Jan 2, the company’s board announced a quarterly dividend of 12 cents per share. This dividend will be paid on Jan 30, to shareholders of record on Jan 15, 2020.

Outlook

The company expects solid construction and infrastructure demand. However, construction activity might be affected by seasonality related to holidays and winter weather conditions during the fiscal second quarter. While the company expects metal margin to remain above the historical average, the same might decline from the prior-quarter levels.

Its optimization efforts and expanded domestic mill network during the reported quarter will yield benefits in the days ahead. Further, Commercial Metals expects Fabrication will remain profitable and the Recycling business is likely to benefit from the recent rebound in ferrous scrap prices.

Price Performance

Commercial Metals’ shares have appreciated 39.3% over the past year as against the industry’s decline of 10.1%.



Zacks Rank & Other Key Picks

Commercial Metals currently flaunts a Zacks Rank #1 (Strong Buy).

Few other top-ranked stocks in the Basic Materials space are Daqo New Energy Corp. (DQ - Free Report) , Pan American Silver Corp. (PAAS - Free Report) and Sibanye Gold Limited . While Daqo New Energy and Pan American Silver currently sporting a Zacks Rank #1, Sibanye Gold carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has an outstanding projected earnings growth rate of 294.7% for 2020. The company’s shares have surged 105% over the past year.

Pan American Silver has an estimated earnings growth rate of 38.1% for the ongoing year. The stock has gained 55.3% in a year’s time.

Sibanye Gold has a projected earnings growth rate of a whopping 587.5% for the current year. Shares of the company have soared 248.1% in the past year.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.

These 7 were selected because of their superior potential for immediate breakout.
 
See these time-sensitive tickers now >>

Published in