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Feb 29, 2024
Commercial Metals Q2 2024 Earnings Report
Commercial Metals Company reported strong financial results driven by solid construction activity in North America and improved market conditions in Europe.
Key Takeaways
Commercial Metals Company (CMC) announced its fiscal second quarter results with net earnings of $85.8 million, or $0.73 per diluted share, on net sales of $1.8 billion. The company's North America and Europe Steel Groups achieved year-over-year improvements in controllable costs, and the Europe Steel Group saw sequential improvements in operating results. Downstream contract awards rebounded, signaling strength in the upcoming construction season.
Second quarter net earnings reached $85.8 million, or $0.73 per diluted share.
Consolidated core EBITDA was $224.4 million with a core EBITDA margin of 12.1%.
Downstream contract awards saw the highest quarterly level in nearly two years.
North America and Europe Steel Groups improved controllable costs per ton of finished steel shipped.
Revenue by Segment
Forward Guidance
Finished steel shipments within our North America Steel Group are expected to follow a typical seasonal pattern during the third quarter, while adjusted EBITDA margin should be largely stable on a sequential basis. Conditions in Europe are expected to remain challenging, but adjusted EBITDA is anticipated to approach breakeven levels during the third quarter. Financial results for our Emerging Businesses Group should improve meaningfully, driven by the normal seasonal uptick in demand, strong underlying market fundamentals and a healthy order book.
Positive Outlook
- Robust spring and summer construction activity is expected, driven by increased infrastructure investments.
- Strong demand backdrop is anticipated in both the North America Steel Group and the Emerging Businesses Group.
- Business conditions for our Europe Steel Group are slowly improving.
- Europe should further benefit from increased residential construction activity as a government program aimed at first-time homebuyers, and other government sponsored investment programs, begin to impact steel demand.
- Adjusted EBITDA margin in North America Steel Group should be largely stable on a sequential basis.
Challenges Ahead
- Conditions in Europe are expected to remain challenging.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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