Why Commercial Metals Shares Are Gaining Today

Commercial Metals Co CMC reported third-quarter FY23 sales of $2.34 billion, which beat the consensus of $2.24 billion.

The average selling price for steel products decreased by $131 per ton compared to Q3 2022, while the cost of scrap utilized declined $88 per ton leading to a decrease of $43 per ton Y/Y in steel products margin over scrap.

Adjusted EPS of $2.02 beat the consensus of $1.76.

Core EBITDA decreased to $391.7 million from $483.9 million a year ago.

The North America segment's Q3 adjusted EBITDA rose to $402.2 million from $379.4 million in the prior year, led by increased business activity and ongoing cost reductions.

Operating cash flow in nine months totaled $934.7 million, compared to $241.7 million a year ago.

As of May 31, 2023, Commercial Metals' cash and equivalents were $475.5 million.

On June 21, 2023, the board of directors declared a quarterly dividend of $0.16 per share, payable on July 12, 2023, to stockholders of record on July 3, 2023.

Barbara R. Smith, Chairman of the Board and Chief Executive Officer, commented, "During the third quarter, North American segment volumes were supported by significant structural trends, including the re-shoring of manufacturing and logistical supply chains, and increasing investment to improve the condition and functionality of our nation's core infrastructure and energy markets. We expect increased activity in these rebar-intensive construction sectors will continue to drive demand in the quarters and years ahead."

"We expect financial performance to remain strong during the fourth quarter of fiscal 2023. North America finished steel product shipments are anticipated to be consistent with the third quarter, supported by healthy end market demand and our historically high downstream backlog. Margin levels in North America should be similar to the third quarter. Results in our Europe segment are expected to be relatively unchanged from the third quarter, reflecting continued economic uncertainty."

Price Action: CMC shares are trading higher by 5.30% at $50.15 on the last check Thursday.