Commercial Metals (CMC) Q4 Earnings Beat, Revenues Miss

Commercial Metals Company CMC reported fourth-quarter 2019 adjusted earnings per share of 76 cents, beating the Zacks Consensus Estimate of 70 cents. The figure also surged 49% year over year.

Including one-time items, the company reported net income of 72 cents per share during the fourth quarter compared with the prior-year quarter’s 43 cents.

Net sales for the reported quarter surged 18% year over year to $1,543 million. However, the reported figure missed the Zacks Consensus Estimate of $1,569 million.

Commercial Metals Company Price, Consensus and EPS Surprise

Commercial Metals Company price-consensus-eps-surprise-chart | Commercial Metals Company Quote

Cost of goods sold in the reported quarter improved around 15% year over year to roughly $1,290 million. Gross profit surged 38% year over year to $253 million in the quarter. Core EBITDA was $1596 million in the fiscal fourth quarter compared with the year-ago quarter’s $124 million.

Financials

Commercial Metals exited fiscal 2019 with cash and cash equivalents of $192.5 million compared with $622.5 million at the end of fiscal 2018. The company’s long-term debt increased to $1,227 million at the end of fiscal 2019 from $1,139 million recorded as of the end of fiscal 2018. Cash flow from operating activities were $37 million during the fiscal 2019 compared with cash usage of $434 million in the prior fiscal.

Fiscal 2019 Performance

Adjusted earnings per share in fiscal 2019 improved 40% year over year to $2.08, which surpassed the Zacks Consensus Estimate of $2.02. Including one-time items, the company reported earnings per share of $1.67 in fiscal 2019 compared with $1.14 in fiscal 2018.

Net sales in fiscal 2019 grew 26% year over year to $5.83 billion. However, the reported figure missed the Zacks Consensus Estimate of $5.88 billion.

Outlook

Backed by a solid fabrication backlog, current positive rebar margin environment and momentum in the Polish operations, the company expects improved results in fiscal 2020.

Price Performance

Commercial Metals’ shares have fallen 0.2% over the past year, compared with the industry’s decline of 25.5%.

Zacks Rank & Stocks to Consider

Commercial Metals currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Agnico Eagle Mines Limited AEM, Franco-Nevada Corporation FNV and Kirkland Lake Gold Ltd. KL, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle Mines has an expected earnings growth rate of 162.86% for 2019. The company’s shares have gained 50% in the past year.

Franco-Nevada Corporation has a projected earnings growth rate of 39.32% for the current year. The company’s shares have rallied 52% in a year’s time.

Kirkland Lake Gold has an estimated earnings growth rate of 71.32% for the ongoing year. Its shares have appreciated 123% in the past year.

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