Commercial Metals Company
) reported earnings of 39 cents per share in the first quarter of
fiscal 2014 (ended Nov 30, 2013), a 7% decline from 42 cents per
share recorded a year ago.
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After adjusting after-tax gains of $15.5 million (13 cents per
share) related to the sale of Howell Metal Company and an
after-tax LIFO expense of $2.8 million (2 cents per share),
earnings were 28 cents per share, outpacing the Zacks Consensus
Estimate of 21 cents.
Revenues fell roughly 4% year over year to around $1,683 million,
missing the Zacks Consensus Estimate of $1,703 million. Adjusted
operating profit dipped roughly 0.6% to $90 million.
Revenues from Commercial Metals' Americas Recycling segment
slipped 4% to roughly $338 million in the reported quarter as
declines in metal margins and nonferrous selling pricing more
than offset higher ferrous selling prices.
The Americas Mills segment registered sales of roughly $481
million, up 5.5% year over year. While shipments of high-margin
products increased, shipment of lower margin billets declined.
Revenues from the Americas Fabrication unit remained flat at $358
million in the reported quarter compared with the same quarter in
the prior year. This segment registered improvements in key
commercial and operating metrics, including tons bid, tons booked
and tons shipped as well as a slight increase in the backlog.
Increased volumes and metal margin contributed to a 3.2% increase
in revenues from the International Mill division to $229 million.
Modest improvement in the Polish and surrounding markets along
with a shift to higher margin merchant products also aided to the
Revenues from the International Marketing and Distribution
segment fell 16% to $511 million, impacted by pre-tax LIFO
expense. Though the U.S.-based trading divisions within this
segment posted solid results, it was offset by weakness in the
European and Australian trading and distribution groups.
Commercial Metals ended the quarter with cash and cash
equivalents of $515.5 million, up nearly 90% year over year.
Total long-term debt increased roughly 34% year over year to
Moving ahead, Commercial Metals anticipates a sluggish
second-quarter fiscal 2014 due to the holiday season and winter
weather conditions, which are expected to reduce construction
activities. As executed in the previous years, Commercial Metals
will be undergoing planned outages for maintenance and equipment
enhancement so as to take advantage of the expected slower
business activity likely to be faced in the second quarter.
Commercial Metals currently carries a Zacks Rank #3 (Hold).
Other companies in the steel industry with favorable Zacks Rank
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AK Steel Holding Corp.
). While Companhia Siderurgica and ArcelorMittal hold a Zacks
Rank #1 (Strong Buy), AK Steel retains a Zacks Rank #2 (Buy).