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Released January 07, 2015 | 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, saw a string of setbacks, including declining scrap prices and weaker shipments for ferrous metal and other products, in the first quarter of its 2015 fiscal year. Net earnings were reported to be $36.25 million, a 21.05% decrease from the first quarter of the 2014 fiscal year.
As part of its North American Metals & Minerals Project Database, Industrial Info is tracking $45 million in active CMC projects, including the $20 million addition of a reheat furnace at a structural steel minimill in Seguin, Texas. The 150-ton-per-hour furnace will be part of a new, 12,600-square-foot building at the minimill, which currently has a capacity of 1.8 million tons per year of steel. The project is expected to be completed in toward the middle of 2015.
Industrial Info also is tracking several CMC maintenance programs throughout the year.
Total net sales stood at $1.68 billion, a 3.89% increase from the same period last year. The Americas Mills segment benefited from higher shipments and ferrous scrap selling prices, as well as higher shipments for higher-priced finished products and lower-priced billet shipments, while the International Marketing & Distribution segment benefited from an increase in overall metal margins. However, the Americas Recycling segment saw operating losses following a drop in ferrous metal shipments and margins, while the Americas Fabrication segment took a hit from rising material prices and conversion costs for rebar, and the International Mills segment reported lower shipments due to sluggish demand in Europe.
CMC executives noted that the first quarter of fiscal 2014 included a $15.5 million after-tax gain from the sale of Howell Metal Company, its copper tube-manufacturing business. The company's first-quarter 2015 results also were affected by a three-week planned outage at a Polish minimill. CMC sold off its Australian steel distribution business, which is now listed as a discontinued operation.
Capital expenditures were reported to be $22.45 million, compared with $14.09 million in first quarter of fiscal 2014.
"Although volumes have strengthened over the same period of the prior fiscal year, we continue to see pricing pressure as a result of elevated import activity," said Joe Alvarado, the chairman, president and chief executive officer of CMC, in a conference call. "Rebar imports have increased approximately 40% year-over-year, primarily from Turkey. And iron ore prices remain low, driving the cost of scrap down."
Capital expenditures for fiscal 2015 are expected to total between $140 million and $180 million. CMC executives expect the current quarter to be slower, given seasonal factors such as holidays and the winter weather. Per custom, the company plans to perform outages, maintenance and equipment upgrades at its facilities.
"We are encouraged by the continuing improvement in the U.S. economy, with job growth and rising wages," Alvarado said. "U.S. manufacturing activity expanded for the 18th consecutive month in November 2014, and U.S. nonresidential construction spending increased during the first three months during our fiscal 2015."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, 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.
As part of its North American Metals & Minerals Project Database, Industrial Info is tracking $45 million in active CMC projects, including the $20 million addition of a reheat furnace at a structural steel minimill in Seguin, Texas. The 150-ton-per-hour furnace will be part of a new, 12,600-square-foot building at the minimill, which currently has a capacity of 1.8 million tons per year of steel. The project is expected to be completed in toward the middle of 2015.
Industrial Info also is tracking several CMC maintenance programs throughout the year.
Total net sales stood at $1.68 billion, a 3.89% increase from the same period last year. The Americas Mills segment benefited from higher shipments and ferrous scrap selling prices, as well as higher shipments for higher-priced finished products and lower-priced billet shipments, while the International Marketing & Distribution segment benefited from an increase in overall metal margins. However, the Americas Recycling segment saw operating losses following a drop in ferrous metal shipments and margins, while the Americas Fabrication segment took a hit from rising material prices and conversion costs for rebar, and the International Mills segment reported lower shipments due to sluggish demand in Europe.
CMC executives noted that the first quarter of fiscal 2014 included a $15.5 million after-tax gain from the sale of Howell Metal Company, its copper tube-manufacturing business. The company's first-quarter 2015 results also were affected by a three-week planned outage at a Polish minimill. CMC sold off its Australian steel distribution business, which is now listed as a discontinued operation.
Capital expenditures were reported to be $22.45 million, compared with $14.09 million in first quarter of fiscal 2014.
"Although volumes have strengthened over the same period of the prior fiscal year, we continue to see pricing pressure as a result of elevated import activity," said Joe Alvarado, the chairman, president and chief executive officer of CMC, in a conference call. "Rebar imports have increased approximately 40% year-over-year, primarily from Turkey. And iron ore prices remain low, driving the cost of scrap down."
Capital expenditures for fiscal 2015 are expected to total between $140 million and $180 million. CMC executives expect the current quarter to be slower, given seasonal factors such as holidays and the winter weather. Per custom, the company plans to perform outages, maintenance and equipment upgrades at its facilities.
"We are encouraged by the continuing improvement in the U.S. economy, with job growth and rising wages," Alvarado said. "U.S. manufacturing activity expanded for the 18th consecutive month in November 2014, and U.S. nonresidential construction spending increased during the first three months during our fiscal 2015."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, 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.
