Loading...
•
Nov 30, 2022
Commercial Metals Q1 2023 Earnings Report
Commercial Metals Company reported strong Q1 2023 results driven by robust demand in North America and Europe, with significant growth in earnings and strategic initiatives progressing as planned.
Key Takeaways
Commercial Metals Company reported a strong first quarter in fiscal year 2023, with net earnings increasing to $261.8 million, or $2.20 per diluted share, up 12% from the prior year. The company benefited from strong demand in North America and Europe, with strategic initiatives like the Arizona 2 project on track.
Net earnings increased by 12% year-over-year, reaching $261.8 million.
Core EBITDA grew by 30% compared to the prior year period.
North America downstream backlog and project bidding volumes continued to grow year-over-year.
Europe segment achieved historically strong profitability due to a favorable cost structure, driving market share gains.
Commercial Metals
Commercial Metals
Commercial Metals Revenue by Segment
Revenue by Segment
NA Steel Group Revenue
CapyFin.comEurope Steel Group Revenue
CapyFin.comCorporate & Other Revenue
CapyFin.com Forward Guidance
CMC anticipates good financial results in the second quarter compared to historical standards, but expects finished steel volumes in North America and Europe to follow typical seasonal patterns and margins to compress from first quarter levels.
Positive Outlook
- Volumes and average pricing within CMC’s North America downstream backlog are at historically high levels.
- The company continues to experience a robust inflow of bidding activity on new projects.
- Current and new reshoring projects, as well as rising levels of infrastructure spending, are expected to support CMC’s North America volumes in the quarters ahead.
- The commissioning of Arizona 2 will provide the Company with greater ability to capitalize on emerging structural economic trends.
- CMC’s favorable relative cost position within Europe will continue to benefit financial performance.
Challenges Ahead
- Some sectors of the construction market will likely be impacted by the changing interest rate environment.
- Finished steel volumes in North America and Europe are expected to follow typical seasonal patterns, which have historically declined from first quarter levels due to weather conditions and holidays.
- Volumes in Europe may be impacted by economic uncertainty.
- Margins over scrap in both North America and Europe are expected to compress from first quarter levels.
- Controllable costs per ton of finished steel increased relative to the prior year period, primarily as a result of higher per unit purchase costs for energy, alloys, and freight.
Revenue & Expenses
Visualization of income flow from segment revenue to net income