Momentum Stock in Focus: Commercial Metals Company (NYSE: CMC)

Commercial Metals Company (NYSE: CMC) spotted trading -23.96% off 52-week high price. On the other end, the stock has been noted 69.89% away from the low price over the last 52-weeks. The stock changed 4.34% to recent value of $18.28. The stock transacted 1492405 shares during most recent day however it has an average volume of 1588.76K shares. The company has 118.92M of outstanding shares and 117.51M shares were floated in the market.

Commercial Metals Company (CMC) recently reported financial results for its fiscal third quarter ended May 31, 2020.  Third quarter earnings from continuing operations were $64.2M, or $0.53 per diluted share, on net sales of $1.3B , contrast to previous year period earnings from continuing operations of $78.6M , or $0.66 per diluted share, on net sales of $1.6B .

During the third quarter of fiscal 2020, we incurred a $6.2M net after-tax charge for facility closure expenses and asset impairments primarily related to the curtailment of a west coast fabrication facility.  This decision was made in accordance with our ongoing network optimization efforts and is predictable to provide cost benefits in future periods.  Not Including these expenses, adjusted earnings from continuing operations for the three months ended May 31, 2020 were $70.4M, or $0.59 per diluted share, as detailed in the non-GAAP reconciliation on page 12. This compares to adjusted earnings from continuing operations of $0.67 per diluted share for the three months ended May 31, 2019.

Barbara R. Smith , Chairman of the Board, President and Chief Executive Officer, commented, “While the effects of the COVID-19 crisis influenced our business throughout the third quarter, CMC acted early and swiftly to ensure the safety of our employees, the continuity of our operations, and the uninterrupted service to our consumers.  Our entire organization can be proud of these efforts and their results.  We were able to keep our workforce fully employed and safe.  We also avoided any meaningful disruptions to operations and experienced no loss of productivity, while closely following CDC guidelines at all of our locations.”

Business Sections – Fiscal Third Quarter 2020 Review

Our Americas Recycling section recorded an adjusted EBITDA loss of $1.7M for the third quarter of fiscal 2020, contrast to adjusted EBITDA of $12.3M for the previous year quarter.  The reduction reflected a challenging environment of lower shipments and decreasing average selling prices.  Volumes were influenced by sharply reduced demand from third party mill consumers. Inflows of material to our yards were slowed by broadly weak manufacturing activity, and low prices that disincentivized collection of obsolete scrap. Contrast to the year ago period, ferrous shipping volumes and selling prices were down 21% and 15%, respectively.

Our Americas Mills section recorded adjusted EBITDA of $133.2M for the third quarter of fiscal 2020, a decrease of 16% contrast to adjusted EBITDA of $158.1M for the third quarter of fiscal 2019.  Despite the impact of COVID-19 on the U.S. economy, volumes declined only 4% contrast to the previous year period Because of continued strength in construction activity.  Metal margins contracted by $19 per ton year-over-year, as a reduction in average selling price of $64 per ton was only partially offset by lower scrap costs.  Results in the third quarter of fiscal 2020 benefited from our best conversion cost performance since our November 2018 rebar asset acquisition.  Conversion costs per ton were 7% below the post-acquisition average.

Our Americas Fabrication section recorded adjusted EBITDA of $31.9M for the third quarter of fiscal 2020, marking a important improvement from an adjusted EBITDA loss of $23.3M for the third quarter of fiscal 2019, primarily Because of expanded selling price margins over rebar cost.  The third quarter of fiscal 2020 marks the section’s best quarterly profit performance in nearly 12 years, and highlights the beneficial impact of the fixed price contract backlog of our fabrication business during a period of economic slowdown.  As in previous quarters, third quarter adjusted EBITDA did not include the benefit of the purchase accounting adjustment related to amortization of the purchased unfavorable contract backlog reserve of $4.4M .  The trend of year-over-year increases in selling price continued during the quarter, as we shipped at an average price of $966 per ton.  This represented a important rise of $41 per ton, or 4%, contrast to the previous year period.  Backlog remains very strong in relation to both quantity and pricing.

Our International Mill section in Poland recorded adjusted EBITDA of $14.3M for the third quarter of fiscal 2020, contrast to adjusted EBITDA of $24.1M for the previousyear quarter.  Metal margins were influenced by continued import pressure.  Despite market challenges caused by COVID-19, shipment volumes reduced only 1% on a year-over-year basis, driven by resilience in the Polish construction sector and market share gains in merchant products.

 Its earnings per share (EPS) expected to touch remained 39.40% for this year while earning per share for the next 5-years is expected to reach at -6.57%. CMC has a gross margin of 16.10% and an operating margin of 8.00% while its profit margin remained 5.30% for the last 12 months. According to the most recent quarter its current ratio was 3.2 that represents company’s ability to meet its current financial obligations. The price moved ahead of 4.60% from the mean of 20 days, 11.06% from mean of 50 days SMA and performed -1.47% from mean of 200 days price. Company’s performance for the week was -8.60%, 27.39% for month and YTD performance remained -17.92%.


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