Commercial Metals Q2 Results Miss Estimates

(RTTNews) - Steel and metal products maker Commercial Metals Co. (CMC) reported Tuesday a profit for the second quarter that increased from last year, despite a sales drop. However, both earnings per share and quarterly sales missed analysts' expectations amid seasonality, holiday slowdowns and bad weather conditions. Looking ahead, the company said it anticipates the third quarter to bring in seasonal improvements in the construction markets amid warmer weather.

"As expected, results for the second quarter declined due to the impact of normal seasonality, inclement weather conditions particularly in North America and holiday slowdowns. However, we are encouraged by the second quarter results of our Polish operations, which were driven by economic improvements in Poland and surrounding markets," Chairman, President and CEO Joe Alvarado said.

The Irving, Texas-based company reported net earnings of $11.14 million or $0.09 per share for the second quarter, higher than $4.58 million or $0.04 per share in the prior-year quarter.

Earnings from continuing operations for the quarter declined to $11.06 million or $0.09 per share from $3.93 million or $0.03 per share in the year-ago quarter.

Results for the latest quarter include an after-tax charge of about $0.03 per share related to the company's final settlement of the Standard Iron Works v. Arcelor Mittal et al. lawsuit.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the quarter decreased to $1.65 billion from $1.69 billion in the same quarter last year, and missed eight Wall Street analysts' consensus estimate of $1.70 billion.

Americas Recycling reported sales that declined to $342 million from $351 million, while sales at Americas Mills grew to $457 million from $436 million last year.

At Americas Fabrication, sales increased to $326 million from $318 million in the prior-year quarter, and International Mill sales edged up to $181 million from $180 million in the year-ago quarter.

International Marketing and Distribution sales were $572 million, down from $650 million a year ago.

On Wednesday, the company declared a quarterly dividend of $0.12, payable on April 23 to shareholders of record on April 9, 2014.

"Our third quarter typically brings warmer weather and therefore seasonal improvements in the construction markets, which we expect will spur activity in the industry. Overall, the U.S. construction markets continued to show improvement during the second quarter of 2014, but at a slower pace than we would like to see," Alvarado added.

CMC closed Wednesday's regular trading session at $18.94, down $0.69 on a volume of 0.94 million shares.