Commercial Metals Company (CMC) reported earnings of 42 cents per share for first-quarter fiscal 2013 (ended November 30, 2012), down from 93 cents per share recorded a year ago. Its profit fell roughly 54% year over year to $49.7 million. Lower demand hurt the Texas-based steel and metals maker’s bottom line.
Excluding a one-time gain associated with the sale of its 11% stake in a Czech Republic joint-stock company, Commercial Metals earned 28 cents a share in the quarter, topping the Zacks Consensus Estimate of 17 cents.
Revenues fell nearly 10% year over year to $1,789 million, missing the Zacks Consensus Estimate of $1,875 million. Adjusted operating profit more than quadrupled to $90.6 million.
Revenues from the company’s Americas Recycling segment slipped 15% to roughly $352 million as lower mill operating rates and uncertain economic environment affected demand in the quarter.
The Americas Mills segment posted sales of $496.4 million, down roughly 6% year over year. Revenues from the Americas Fabrication unit rose roughly 12% to $356.6 million, aided by stable material pricing.
However, a weak European market contributed to a 25% decline in revenues from the International Mill division to $222 million. International Marketing and Distribution segment’s sales fell 14% to $608.6 million. Uncertainty across key global markets continues to affect the division.
Commercial Metals ended the first quarter with cash and cash equivalents of $271.4 million, up 19% year over year. Total long-term debt was $1,158 million, essentially flat year over year.
Moving ahead, the company expects the fledgling recovery in domestic construction end markets to support results in the future reporting periods. It expects the Americas Recycling segment to benefit from better scrap pricing in the second quarter. However, the company envisions continued weakness in the International Marketing and Distribution segment while the challenging environment in the euro zone is expected to continue to affect its International Mill unit.
Commercial Metals currently holds a Zacks #4 Rank, which translates into a short-term Sell rating. Nucor Corporation (NUE), which also belongs to the steel and iron industry, also retains a Zacks #4 Rank (Sell).
COMMERCIAL METL (CMC): Free Stock Analysis Report
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