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Aug 31, 2020
Commercial Metals Q4 2020 Earnings Report
Commercial Metals reported strong Q4 results driven by enhanced earnings, increased cash flow, additional operational flexibility, and a robust balance sheet.
Key Takeaways
Commercial Metals Company reported a 5.6% sequential increase in fourth-quarter GAAP Earnings from Continuing Operations and a 35% increase in Adjusted Earnings from Continuing Operations. The company's fourth-quarter Core EBITDA rose 14% sequentially, with the full year 2020 Core EBITDA increasing 30% year-over-year. The North America segment Adjusted EBITDA increased 9% sequentially due to higher shipments and strong cost management.
Fourth quarter GAAP Earnings from Continuing Operations increased 5.6% sequentially, Adjusted Earnings from Continuing Operations increased 35%.
Fourth quarter Core EBITDA rose 14% sequentially. Fiscal year 2020 Core EBITDA increased 30% year-over-year.
Fourth quarter North America segment Adjusted EBITDA increased 9% sequentially, driven by higher shipments of finished product and strong cost management throughout the vertically integrated value chain.
Generated full year Cash from Operations of $791.2 million
Revenue by Segment
Forward Guidance
The company anticipates finished steel volumes to follow typical seasonal trends in the first fiscal quarter, with some negative impact in North America due to storms. Near-term shipments should be supported by a solid construction backlog. Margin headwinds are expected in North America due to rising scrap costs, partially mitigated by steel price increases. The European market is expected to remain challenged by elevated import levels, but demand appears solid.
Positive Outlook
- Shipments of steel and downstream products in the near-term should be supported by our solid construction backlog.
- Steel price increases that became effective during the quarter
Challenges Ahead
- Finished steel volumes for our North America and Europe operations to follow typical seasonal trends in the first fiscal quarter
- Some negative impact in North America due to storms in the Texas and Gulf Coast markets
- We anticipate margin headwinds in the first quarter within North America due to the recent rise in scrap costs
- The market for long products in Europe is expected to remain challenged due to elevated import levels.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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