Commercial Metals Profit Drops 89% On Slumping Demand
DOW JONES NEWSWIRES
Commercial Metals Co.'s (CMC) fiscal fourth-quarter profit fell 89% as the
steelmaker and recycler saw revenue halved amid lower demand and falling prices.
While demand and output were higher from the prior quarter, President and
Chief Executive Murray R. McClean said the jump "was more due to restocking than
any pickup in real demand."
Shares recently traded down 5.7% to $14.96 even as results weren't as bad as
analysts feared. The stock is still up 26% this year.
McClean went on to say Commercial Metals remains concerned about continued
sustainability of demand, and it saw negligible benefit from U.S. government
stimulus. But those programs "are likely to be effective" starting in January, "
but at a slow pace." He added private, nonresidential construction should remain
weak, with fiscal first-quarter prices trending "moderately lower" with
shipments at slightly lower levels than the fourth quarter.
For the period ended Aug. 31, Commercial Metals reported earnings of $7.2
million, or 6 cents a share, down from $63.5 million, or 55 cents, a year
earlier. Inventory accounting boosted the latest quarter's bottom line by 21
cents, while it cut profit by 78 cents last year.
Revenue fell 51% to $1.5 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of a
penny a share on $1.46 billion in sales.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@
dowjones.com;
(END) Dow Jones Newswires
10-30-091006ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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