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Aug 31, 2022
Commercial Metals Q4 2022 Earnings Report
Commercial Metals Company reported an increase in fourth-quarter earnings, driven by strong market conditions in North America and solid execution.
Key Takeaways
Commercial Metals Company reported a strong fourth quarter with net earnings of $288.6 million, or $2.40 per diluted share, an 89% increase compared to the prior year period. The company generated record annual core EBITDA of $1.6 billion, with the fourth quarter core EBITDA of $419.0 million representing the second-highest in company history. Strong market conditions and operational execution offset inflationary pressures, contributing to the positive results.
Net earnings for the fourth quarter increased by 89% year-over-year, reaching $288.6 million, or $2.40 per diluted share.
Record annual core EBITDA was $1.6 billion, with the fourth quarter contributing $419.0 million, a 64% increase year-over-year.
Core EBITDA per ton of finished steel shipped increased by $113 from the prior year quarter, driven by favorable market conditions and operational execution.
The company repurchased $106.3 million of common stock during the quarter and announced a 14% increase to the quarterly dividend.
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
Commercial Metals Company anticipates strong financial performance in the first fiscal quarter of 2023, driven by robust demand in North America. Market conditions in Europe are more uncertain due to the ongoing energy crisis and slowing industrial activity. Margins over scrap in both North America and Europe are likely to compress.
Positive Outlook
- North America contract backlog volumes and average pricing are at historically high levels.
- Downstream bidding activity remains good, indicating a strong pipeline of projects entering the market.
- The expected commissioning of CMC’s Arizona 2 micro mill next spring will provide greater flexibility to capitalize on favorable demand conditions.
- The addition of Tensar’s engineered solutions capabilities will provide greater flexibility to capitalize on favorable demand conditions.
- Robust demand in North America for each of CMC’s major product lines is expected to persist.
Challenges Ahead
- Market conditions in Europe are more uncertain, given the ongoing energy crisis and slowing industrial activity.
- Finished steel volumes are expected to follow typical seasonal patterns, which have historically declined modestly from fourth quarter levels.
- Margins over scrap in both North America and Europe are likely to compress from fourth quarter levels.
- Increased long steel supply from imports may impact margins.
- Volatile conditions in Europe could present challenges.
Revenue & Expenses
Visualization of income flow from segment revenue to net income