Commercial Metals Q3 Results Miss Estimates

(RTTNews) - Steel and metal products maker Commercial Metals Co. (CMC) reported Friday a profit for the third quarter that increased from last year, reflecting improved sales amid seasonal construction activity. However, both earnings per share and quarterly sales missed analysts' expectations. Looking ahead, the company said it anticipates the fourth quarter to remain sequentially consistent with the third quarter.

"The results for the third quarter of fiscal 2014 were lifted by seasonal construction activity. We are particularly pleased with the strong results from our Americas Mills segment which recorded the best quarterly adjusted operating profit since our first quarter of fiscal 2009," Chairman, President and CEO Joe Alvarado said in a statement.

The Irving, Texas-based company reported net earnings of $23.56 million, or $0.20 per share for the third quarter, higher than $18.96 million, or $0.16 per share in the prior-year quarter.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the quarter increased to $1.80 billion from $1.75 billion in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $1.85 billion.

Americas recycling reported sales that declined to $335 million from $341 million, while sales at Americas Mills grew to $528 million from $462 million last year.

At Americas Fabrication, sales increased to $409 million from $384 million in the prior-year quarter, and International Mill sales edged up to $207 million from $201 million in the year-ago quarter.

International Marketing and Distribution sales were $604 million, down from $594 million a year ago.

During the quarter, the company said it successfully commissioned a new electric arc furnace in Poland, and saw positive preliminary results, although final commissioning and debugging is ongoing.

Earlier in the month, the company acquired a small recycling facility that will provide a low cost, reliable source of raw material to its steel mill in Seguin, Texas. The acquisition is consistent with the company's vertically-integrated manufacturing model.

On Wednesday, the company declared a quarterly dividend of $0.12, payable on July 24 to shareholders of record on July 10, 2014.

Looking ahead, the company said it anticipates operational results for the fourth quarter of fiscal 2014 to remain consistent with the results of the third quarter of fiscal 2014.

"As a result of the new electric arc furnace that our Polish operations successfully commissioned during the third quarter of fiscal 2014, we anticipate that our International Mill segment will begin to benefit from productivity and cost improvements in fiscal 2015," Alvarado added.

CMC closed Thursday's regular trading session at $18.09, up $0.05 on a volume of 0.68 million shares.