Steel and metal products maker Commercial Metals Co. (CMC) on Thursday reported a profit for the third quarter that more than doubled from last year, as a double-digit decline in sales was offset by lower costs and expenses. Earnings per share topped analysts' expectations, while quarterly net sales missed their estimates.
"Fiscal third quarter adjusted EBITDA from continuing operations represents our highest adjusted EBITDA since the first quarter of fiscal 2009. Our domestic mills continued to benefit from expanding metal margins as a result of lower raw material prices when compared to one year ago," Chairman, President and CEO Joe Alvarado said.
The Irving, Texas-based company reported net earnings for the third quarter of $56.68 million or $0.49 per share, up from $23.56 million or $0.20 per share in the prior-year quarter.
On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude special items.
The latest quarter's results include an after-tax LIFO income from continuing operations of $24.1 million or $0.21 per share. This compares to after-tax LIFO income from continuing operations of $5.3 million or $0.04 per share, in the year-ago period.
Total net sales for the quarter decreased 13 percent to $1.51 billion from $1.74 billion in the same quarter last year and also missed analysts' consensus revenue estimate of $1.58 billion.
Americas Recycling sales decreased 33 percent to $225.10 million, while sales at Americas Mills declined 15 percent to $446.82 million.
At Americas Fabrication, sales increased 2 percent to $417.90 million, while International Mill sales declined 25 percent to $156.32 million. International marketing and distribution sales declined 6 percent to $518.24 million.
The company's total costs and expenses for the quarter declined 17 percent from last year to $1.40 billion.
Looking ahead, Alvarado said, "As we enter our fiscal fourth quarter, our key market indicators point toward a strong finish to our fiscal 2015. The demand for our finished steel products in the U.S. and Poland remains high."
Further, Alvarado noted that unfavorable weather in May in the central region of the U.S. resulted in certain construction projects being pushed out into the company's fiscal fourth quarter, which is expected to provide some upside to the fourth-quarter's results.
On June 24, 2015, Commercial Metals' board of directors declared a quarterly dividend of $0.12 per share for shareholders of record on July 9, 2015. The dividend will be paid on July 23, 2015.
CMC is trading at $17.45, up $0.83 or 4.99 percent on a volume of 894,457 shares.
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