Commercial Metals Posts Mixed Q3 as Earnings Miss, but Margin Trends Improve

Commercial Metals (NYSE:CMC) reported fiscal third-quarter results that fell short of expectations, with earnings and revenue both slightly underperforming consensus estimates, though improving metal margins offered a bright spot.

For the quarter, the steel and metal products manufacturer posted adjusted earnings of $0.74 per share, below analyst forecasts of $0.84. Revenue totaled $2.02 billion, just under the $2.05 billion estimate and down from $2.34 billion a year earlier. Net income declined to $83.1 million from $119.4 million in the prior-year period.

Despite the headline miss, the company pointed to sequential improvements in financial performance, particularly in its North America Steel Group, where steel product metal margins began inflecting higher and ended the quarter above the $499 per ton average.

Elsewhere, the Emerging Businesses Group delivered stronger results, with adjusted EBITDA margin improving to 20.7% year over year and sequentially. Meanwhile, the Europe Steel Group returned to profitability, surpassing breakeven levels as market conditions improved.

Management highlighted the success of its ongoing “Transform, Advance, Grow” initiative, which is now tracking above target and expected to deliver an annual EBITDA run-rate benefit exceeding $100 million.