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Released June 28, 2013 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Commercial Metals Company (NYSE:CMC) (CMC) (Irving, Texas), a major steel and metal products firm, reported a dip in earnings for the third quarter of the company's 2013 fiscal year, as weaker global shipments, especially of merchant and light structural products, more than offset improved rebar sales and solid results from the Americas Fabrication segment. Net earnings were reported to be $18.96 million, compared with $40.68 million in third-quarter 2012.
Net sales stood at $1.79 billion, a 10.59% decrease from the same period last year. Despite strong improvement in the Americas Fabrication segment, where margins strengthened following declining raw material input prices, and a modest improvement in rebar shipments, sales prices and volumes declined in most of the company's segments. A drop in ferrous selling prices negatively affected the Americas Recycling segment, while a decline in billet shipments negatively affected the Americas Mills segment.
A 13% drop in volumes in the International Mills segment was driven by weak results from merchant and wire rod products. Overall weakness in the global markets diminished the international raw materials business, particularly for the company's Australian operations.
As part of its North American Metals & Minerals Project Database, Industrial Info is tracking several CMC projects, including the planned revamp of a structural steel minimill in Seguin, Texas. The project, which has an estimated investment value of $6 million, involves replacing and rebuilding a furnace shell, with auxiliary equipment modifications. It is expected to kick off in February 2015. Industrial Info also is tracking $21 million in active maintenance programs at CMC facilities in the U.S. and Poland.
"Although modest increases in key directional indices continued to show signs of recovery in construction markets, these positive trends were more than offset by margin compression caused by declines in selling prices across most of our segments and continued import pressures," said Joe Alvarado, the chairman, president and chief executive officer of CMC, in a conference call. "Extended weakness in global demand and extended overcapacity in Europe and China have depressed steel prices and margins, and have negatively impacted results in our international segments."
CMC executives expect this quarter's results to be similar to those of the third quarter, noting that the International Mills segment is expected to see improved shipping volumes, and the U.S. non-residential construction market is likely to see steady, but not broad-based, gains. An anemic recovery in Europe is likely to weigh on CMC's profits.
"Our International Marketing and Distribution segment will continue to be challenged until the global markets in which we operate display sustained improvement," Alvarado said in the conference call.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Net sales stood at $1.79 billion, a 10.59% decrease from the same period last year. Despite strong improvement in the Americas Fabrication segment, where margins strengthened following declining raw material input prices, and a modest improvement in rebar shipments, sales prices and volumes declined in most of the company's segments. A drop in ferrous selling prices negatively affected the Americas Recycling segment, while a decline in billet shipments negatively affected the Americas Mills segment.
A 13% drop in volumes in the International Mills segment was driven by weak results from merchant and wire rod products. Overall weakness in the global markets diminished the international raw materials business, particularly for the company's Australian operations.
As part of its North American Metals & Minerals Project Database, Industrial Info is tracking several CMC projects, including the planned revamp of a structural steel minimill in Seguin, Texas. The project, which has an estimated investment value of $6 million, involves replacing and rebuilding a furnace shell, with auxiliary equipment modifications. It is expected to kick off in February 2015. Industrial Info also is tracking $21 million in active maintenance programs at CMC facilities in the U.S. and Poland.
"Although modest increases in key directional indices continued to show signs of recovery in construction markets, these positive trends were more than offset by margin compression caused by declines in selling prices across most of our segments and continued import pressures," said Joe Alvarado, the chairman, president and chief executive officer of CMC, in a conference call. "Extended weakness in global demand and extended overcapacity in Europe and China have depressed steel prices and margins, and have negatively impacted results in our international segments."
CMC executives expect this quarter's results to be similar to those of the third quarter, noting that the International Mills segment is expected to see improved shipping volumes, and the U.S. non-residential construction market is likely to see steady, but not broad-based, gains. An anemic recovery in Europe is likely to weigh on CMC's profits.
"Our International Marketing and Distribution segment will continue to be challenged until the global markets in which we operate display sustained improvement," Alvarado said in the conference call.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
