Commercial Metals Company CMC reported third-quarter fiscal 2020 (ended May 31, 2020) adjusted earnings per share of 59 cents, beating the Zacks Consensus Estimate of 28 cents. The figure, however, declined 11.9% year on year.
Including one-time items, the company reported net income of 53 cents per share in the fiscal third quarter compared with the prior-year quarter’s 66 cents.
Net sales for the reported quarter slid 18.7% year over year to $1.3 billion. However, the reported figure beat the Zacks Consensus Estimate of $1.2 billion.
Cost of goods sold in the quarter was down 18.3% year over year to $1.1 billion. Gross profit fell 6.6% year over year to $225 million during this period. Core EBITDA was $155 million in the fiscal third quarter compared to $154 million in the year-ago quarter.
Commercial Metals Company Price, Consensus and EPS Surprise
Commercial Metals Company price-consensus-eps-surprise-chart | Commercial Metals Company Quote
The Americas Recycling segment reported net sales of $203 million in the fiscal third quarter compared with the $289 million recorded in the prior-year quarter. The segment incurred adjusted EBITDA loss of $1.7 million as against the adjusted EBITDA of $12.3 million in the prior-year quarter.
Americas Mills segment’s revenues came in at $741 million, marking a year-over-year decline of 14.5%. Adjusted EBITDA dropped 16% year over year to $133 million.
The Americas Fabrication segment reported net sales of $569 million, down 10.1% from the prior-year quarter’s $633 million. The segment reported adjusted EBITDA of $32 million, as against the EBITDA loss of $23 million posted in the year-ago quarter.
The International Mill segment reported net sales of $174 million the fiscal third quarter compared with the year-earlier quarter’s $209 million. Adjusted EBITDA plunged 42% year over year to $14 million.
Commercial Metals exited the fiscal third quarter with cash and cash equivalents of $462 million compared with the $192 million recorded at the end of fiscal 2019. The company’s long-term debt reduced to $1,153 million at the end of the quarter from the $1,227 million recorded as of the end of fiscal 2019. Cash flow from operating activities were $532 million during the nine-month period ended May 31, 2020 compared with cash usage of $218 million in the prior-year period.
On Jun 16, the company’s board announced a quarterly dividend of 12 cents per share. This dividend will be paid on Jul 20, to shareholders of record on Jul 6, 2020.
The company’s net debt-to-EBITDA ratio of 1.2x and substantial cash flow place it well to sail through the current turbulent situation and provide significant flexibility in capital-allocation priorities.
Commercial Metals continues to expect strong construction and infrastructure activity in the fiscal fourth quarter. Moreover, the company’s fabrication backlogs are strong.
Commercial Metals’ shares have gained 21.2% over the past year, as against the industry’s decline of 27.6%.
Zacks Rank & Stocks to Consider
Commercial Metals currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials sector are Agnico Eagle Mines Limited AEM, B2Gold Corp BTG and Gold Fields Limited GFI. While Agnico Eagle sports a Zacks Rank #1 (Strong Buy), B2Gold and Gold Fields carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has an estimated earnings growth rate of 53.6% for the current year. The company’s shares have surged 20.6% in the past year.
B2Gold has an expected earnings growth rate of 221.4% for the ongoing year. Its shares have appreciated 80.7% in the past year.
Gold Fields has a projected earnings growth rate of 30.9% for 2020. The company’s shares have gained 47.8% in the past year.
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