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Nov 30, 2023
Commercial Metals Q1 2024 Earnings Report
Commercial Metals' Q1 2024 performance marked by solid financial results, driven by strong North America Steel Group demand and strategic growth initiatives.
Key Takeaways
Commercial Metals Company reported net earnings of $176.3 million, or $1.49 per diluted share, on net sales of $2.0 billion for the first quarter of fiscal year 2024. The company's performance was supported by healthy construction activity in North America and continued progress on strategic growth initiatives, including the Arizona 2 micro mill and the Steel West Virginia project.
Net earnings reached $176.3 million, with diluted earnings per share of $1.49.
Consolidated core EBITDA stood at $325.3 million, reflecting a 16.2% core EBITDA margin.
Cash flow from operating activities was $261.1 million, resulting in free cash flow of $194.1 million.
North America Steel Group experienced healthy demand, with finished steel volumes increasing by 1.1% year-over-year.
Commercial Metals
Commercial Metals
Commercial Metals Revenue by Segment
Revenue by Segment
NA Steel Group Revenue
CapyFin.comEurope Steel Group Revenue
CapyFin.comEmerging Businesses Revenue
CapyFin.comCorporate & Other Revenue
CapyFin.com Forward Guidance
Margins on steel products are likely to experience some further compression during the second quarter, however, recent price announcements should support an inflection and improved margins going forward. Downstream product margins should exhibit good sequential stability. Conditions in Europe are expected to remain challenging, but adjusted EBITDA excluding energy rebates should improve from the levels of the past two quarters.
Positive Outlook
- Recent price announcements should support an inflection and improved margins going forward.
- Downstream product margins should exhibit good sequential stability.
- Adjusted EBITDA excluding energy rebates should improve from the levels of the past two quarters.
- Robust spring and summer construction activity driven by increased infrastructure investments.
- Increasing levels of residential and infrastructure construction should drive sequential improvements in financial results beginning in the spring construction season.
Challenges Ahead
- Margins on steel products are likely to experience some further compression during the second quarter.
- Conditions in Europe are expected to remain challenging.
- Lower new contract awards have driven a year-over-year reduction in the volume and value of CMC’s downstream backlog from the peak experienced last year.
- Demand from industrial end markets, which is important for merchant products, was mixed, with certain applications experiencing slower activity compared to the prior year quarter.
- Weather delays in the Central U.S. and lower construction activity in Europe and the Middle East.
Revenue & Expenses
Visualization of income flow from segment revenue to net income