Commercial Metals Q1 Profit Declines

(RTTNews) - Steel and metal products maker Commercial Metals Co. (CMC) reported Tuesday a profit for the first quarter that declined from last year, reflecting a sales drop. Looking ahead, the company said it anticipates the second quarter to be seasonally slower due to reduced construction activities amid holiday slowdowns and winter weather conditions.

"Our results for the first quarter of $0.39 per diluted share are a significant improvement over the fourth quarter ended August 31, 2013 of $0.03 per diluted share. In addition, all five of our reporting segments were profitable and we continue to see improvement in the results of our International Mill segment," Chairman, President and CEO Joe Alvarado said.

The Irving, Texas-based company reported net earnings of $45.92 million or $0.39 per share for the quarter, lower than $49.72 million or $0.42 per share in the prior-year quarter.

Earnings from continuing operations for the quarter declined to $31.96 million or $0.27 per share from $48.93 million or $0.42 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales for the quarter decreased to $1.68 billion from $1.75 billion in the same quarter last year, and missed five Wall Street analysts' consensus estimate of $1.74 billion.

Americas Recycling reported sales that declined to $338 million from $352 million, while sales at Americas Mills grew to $481 million from $457 million last year.

At Americas Fabrication, sales edged up to $358 million from $357 million in the prior-year quarter, and International Mill sales increased to $229 million from $222 million in the year-ago quarter.

International Marketing and Distribution sales were $511 million, down from $609 million a year ago.

On Monday, the company declared a quarterly dividend of $0.12, payable on February 4 to shareholders of record on January 21, 2014.

"We anticipate our second fiscal quarter to be seasonally slower as a result of holiday slowdowns and winter weather conditions, which reduce construction activities. However, many of the economic indicators we highlighted in our prior earnings release for the fiscal fourth quarter of 2013 remain encouraging," Alvarado added.

The company also noted that it will take advantage of the expected slower business activity during our second fiscal quarter to take planned outages for maintenance and to upgrade equipment similar to prior years.

CMC closed Monday's regular trading session at $19.78, down $0.32 on a volume of 1.24 million shares.