Commercial Metals Posts Profit In Q2 On Higher Sales

Published March 29, 2012 | By admin

(RTTNews.com) – Steel and metal products maker Commercial Metals Co. (CMC) on Wednesday reported a turnaround to profit in the second quarter.

The results reflect higher volumes and selling prices at most of the company’s segments compared to the prior year. Earnings for the quarter beat analysts’ expectations.

All of the Irving, Texas-based company’s segments fared better in operational results compared to the year-ago quarter, except Americas Recycling, which was impacted by falling scrap prices in February. Americas Mills was the most profitable segment.

Joe Alvarado, President and Chief Executive Officer of CMC, said in a statement, “We achieved our second highest quarterly adjusted operating profit since the first quarter of fiscal 2009, which was the start of the current recession.”

Looking ahead, CMC said it was encouraged by the strong backlogs for its domestic operations going into the third quarter and was optimistic about their performance if scrap prices remained stable.

Americas Recycling sales for the quarter declined 7 percent, while sales at Americas Mills increased 10 percent. At Americas Fabrication, sales grew 20 percent and International Mills sales rose 6 percent. International Marketing and Distribution sales grew 16 percent.

CMC‘s second-quarter net earnings were $28.85 million or $0.25 per share compared to net loss of $46.16 million or $0.40 per share in the year-ago period.

On average, 11 analysts polled by Thomson Reuters expected the company to earn $0.09 per share for the quarter. Analysts’ estimates typically exclude one-time items.

Net sales for the quarter rose 10 percent to $1.96 billion from $1.78 billion in the same period last year. Analysts had a consensus revenue estimate of $1.98 billion.

Looking ahead, CMC noted that its third quarter is historically the best quarter as the construction season begins with the onset of milder weather.

Alvarado said, “Our backlogs for the International Marketing and Distribution segment are at higher levels than last quarter.”

Further, the CMC board declared a quarterly dividend of $0.12 on March 27, for shareholders of record on April 11, payable on April 25.

CMC closed Tuesday’s trading at $14.40, down $0.20 on a volume of 1.69 million shares.

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Article source: http://www.nasdaq.com/article/commercial-metals-posts-profit-in-q2-on-higher-sales-20120328-00542