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Commercial Metals Company ( CMC ) kicked off 2023 early Monday with strong first-quarter earnings results. The steel recycler and producer topped analysts’ forecasts thanks to better margins in North American markets. CMC stock hit a record high, but reversed to close slightly lower.
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Commercial Steels manufactures a variety of rebar, wire rods, tension cables and paving slabs for the foundations of buildings, bridges, highways and major infrastructure. The Irving, Texas-based steel producer and fabricator recycles more than 19 billion pounds of steel annually at its processing plants, recycling facilities and mills in North America and Poland.
Commercial metals, metal prices
Net earnings per share for the first quarter were $2.20, up 12 percent from $1.90 a year earlier. Excluding certain items, adjusted earnings rose to $2.24 per share, up 38 percent from $1.62 in 2022. Revenue grew 12 percent year-on-year.
Analysts expected Commercial Metals to report earnings of $1.96 per share on revenue of $2.2 billion.
The results represent eight quarters of revenue growth and nine consecutive quarters of revenue increases. However, revenue growth has slowed for the past two quarters and revenue growth has declined for the past five quarters.
In North America, average steel prices increased by $44 per ton, while scrap metal prices decreased by $103 per ton, increasing margins for commercial steel production.
The company attributed the improvement in downstream tender volume compared to last year to the expansion of contract disputes and a larger construction project pipeline compared to last year. The average selling price for downstream products also increased by $307 per ton from last year. Meanwhile, industrial end-market demand was stable over the year.
CMC stock
Trading metals stocks rose to 52.27, a record high, shortly after the open. But the shares changed to close 0.55% at 50.33. CMC’s stock is up more than 40 percent over the past year.
CMC stock has now dropped below the 50.93 buy point on Friday, although it is slightly above 50 from an earlier entry.
You can follow Harrison Miller on Twitter for more stock news and updates. @IBD_Harrison
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