Commercial Metals Company (NYSE:CMC) reported a decrease in its fiscal Q4 profit, which ended on August 31. The company's profit fell to $184.2 million or $1.56 per share, down from the previous year's figure of $288.6 million or $2.40 per share. This decline was largely attributed to reduced steel prices and weak conditions in the European market.
In addition to the decrease in profit, Commercial Metals' adjusted earnings, after accounting for one-time items, were reported at $1.69 per share. This figure falls short of the $1.77 per share expected by analysts polled by FactSet. According to InvestingPro data, the company's P/E ratio stands at 5.91, with a slightly lower adjusted P/E ratio of 5.73 for LTM2023.Q3.
Sales also experienced a downturn, falling to $2.21 billion from the year-ago figure of $2.41 billion. Despite this fall in sales, the company did manage to exceed FactSet's prediction of $2.15 billion. The company's revenue for LTM2023.Q3 was reported at $8.9974 billion, with a revenue growth rate of 5.39%, as per InvestingPro.
The company has faced challenges in maintaining its downstream backlog due to fewer new contracts and application slowdowns, despite healthy demand for finished steel. There was also mixed demand from industrial end markets, further impacting the company's performance during the quarter.
InvestingPro Tips suggest that the company has been aggressively buying back shares and yields a high return on invested capital. It's worth noting that the company has raised its dividend for 3 consecutive years and has a strong return over the last five years. This, coupled with the fact that the company's cash flows can sufficiently cover interest payments, indicates a potentially strong position despite the reported downturn.
The decline in profits and sales for Commercial Metals reflects broader economic trends and market conditions, particularly within the steel industry and the European market. This report provides an insight into the financial health and performance of one of the key players in the global steel industry. For more in-depth tips and real-time metrics, consider subscribing to InvestingPro, which offers 17 additional insightful tips for CMC.
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