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Aug 31, 2023
Commercial Metals Q4 2023 Earnings Report
Commercial Metals' financial performance declined in Q4 2023 compared to the previous year, influenced by weaker conditions in Europe but supported by solid North American demand and strategic initiatives.
Key Takeaways
Commercial Metals Company reported Q4 2023 net earnings of $184.2 million, or $1.56 per diluted share, on net sales of $2.2 billion. While North America showed strength, European market challenges impacted overall results. The company is progressing with strategic growth initiatives, including the Arizona 2 micro mill and the integration of EDSCO Fasteners.
Net earnings for the fourth quarter were $184.2 million, or $1.56 per diluted share.
North America segment adjusted EBITDA increased year-over-year due to solid demand and strong margins.
Downstream new project bid volumes in North America continued to grow, indicating a robust construction pipeline.
Strategic growth initiatives, such as the Arizona 2 production start-up and Tensar earnings, showed meaningful progress.
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
The company expects first quarter consolidated financial performance to remain strong by historical standards, but decline from the fourth quarter as a result of seasonally lower shipments, steel product margin compression in North America, and the continuation of challenging market conditions in Europe.
Positive Outlook
- First quarter consolidated financial performance is expected to remain strong by historical standards.
- Europe operations will receive approximately $60 million from two large government rebate programs.
- Annual CO2 credit estimated at $25 million, up from the $9.5 million received last year.
- Reimbursement by the Polish government for elevated energy costs incurred during the European energy crisis is expected to be $35 million.
- These rebates are expected to drive a sequential improvement in Europe segment adjusted EBITDA.
Challenges Ahead
- First quarter performance is expected to decline from the fourth quarter.
- Seasonally lower shipments are anticipated.
- Steel product margin compression is expected in North America.
- Challenging market conditions in Europe are expected to continue.
- Overall, the first quarter outlook suggests a softening compared to the fourth quarter due to various market and seasonal factors.
Revenue & Expenses
Visualization of income flow from segment revenue to net income