Commercial Metals Company kicked off 2023 with solid first quarter earnings results early Monday. The steel recycler and manufacturer topped analyst forecasts thanks to better margins in its North American markets. CMC stock hit a record high, but reversed to close slightly lower.
Commercial Metals produces various rebar, wire rods, tension cables and paving dowels that lay the foundation for buildings, bridges, highways and major infrastructure. The Irving, Texas-based steel manufacturer and fabricator recycles more than 19 billion pounds of metal annually through its network of processing plants, recycling facilities and mills across North America and Poland.
Commercial Metals, Steel Prices
Net earnings for the first quarter were $2.20 per share, up 12% from $1.90 last year. Excluding certain items, adjusted earnings rose to $2.24 per share, up 38% from $1.62 per share in 2022. Revenue rose 12% year over year to $2.23 billion.
Analysts expected Commercial Metals to report earnings of $1.96 per share on $2.2 billion in revenue.
The results mark eight quarters of earnings growth and nine consecutive quarters of revenue increases. However, earnings growth has slowed for the past two quarters while revenue gains have decelerated for the past five quarters.
The average price of steel rose $44 per ton in North America during the period while the price of scrap metal fell $103 per ton, boosting the Commercial Metal's steel product margins.
Downstream bid volumes improved from last year, the company says, expanding its contract backlog and indicating a larger construction project pipeline compared to last year. The average selling price for its downstream products also increased $307 per ton from last year. Meanwhile, industrial end market demand was stable on a year-over-year basis.
CMC Stock
Commercial Metals stock jumped to 52.27 soon after the open, a record high. But shares reversed to close down 0.55% at 50.33. CMC stock has catapulted more than 40% over the last year.
CMC stock is now back below a 50.93 buy point cleared on Friday, though slightly above an early entry just above 50.
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