IRVING, Texas - Commercial Metals Company (NYSE: NYSE:CMC) today reported a robust second quarter, surpassing analyst expectations with adjusted earnings per share (EPS) of $0.88, which was $0.13 higher than the consensus estimate of $0.75.
Revenue for the quarter was slightly below expectations at $1.8 billion, compared to the analyst estimate of $1.81 billion.
Following the announcement, the stock was up 2.43% in premarket trading Thursday.
The company's financial performance for the quarter was notably strong despite a year-over-year (YoY) decline in net earnings and net sales. Net earnings for the quarter stood at $85.8 million, or $0.73 per diluted share, a decrease from the previous year's $179.8 million, or $1.51 per diluted share. Similarly, net sales saw a reduction from $2.0 billion in the prior year to the current $1.8 billion.
Peter Matt, President and Chief Executive Officer, highlighted the company's ability to generate higher margins, "CMC generated historically strong financial results during the second quarter despite seasonal weakness and challenging weather conditions in several key geographies. Core EBITDA and core EBITDA margin remained well above long-term averages, demonstrating the ability to consistently generate higher margins in our business."
The company's North America and Europe Steel Groups were praised for their significant improvements in controllable costs per ton of finished steel shipped, contributing positively to the financial performance. Furthermore, the Europe Steel Group's operating results saw sequential improvement, and market supply and demand were reported to be in better balance.
Commercial Metals also made progress on strategic growth initiatives, with the Arizona 2 micro mill successfully producing and selling merchant bar product, marking a global micro mill steelmaking first. The company's balance sheet and liquidity position remained strong, with cash and cash equivalents totaling $638.3 million and available liquidity nearing $1.5 billion.
The board of directors declared a quarterly dividend of $0.18 per share of CMC common stock, payable to stockholders of record on April 1, 2024, marking a 13% increase from the prior dividend paid in February 2024.
Looking ahead, Mr. Matt expressed optimism about the upcoming quarters, "We continue to expect robust spring and summer construction activity driven by increased infrastructure investments, which we anticipate will support an already strong demand backdrop in both the North America Steel Group and the Emerging Businesses Group."
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