Commercial Metals Company (CMC) stock is lower today after the company, which manufactures rebar and structural steel in the United States and Poland, announced financial results for the second quarter of fiscal 2022.
The company posted earnings of $383.3 million, or $3.12 per diluted share, on net sales of $2 billion, compared to prior year period earnings of $66.2 million, or $0.54 per diluted share, on net sales of $1.5 billion.
Rising Demand
Barbara R. Smith, Chairman of the Board, President and CEO, attributed much of the company's success to CMC's employees, as well as the higher market demand.
Smith commented, "Outstanding operational execution, combined with strong end-market demand, produced the second-best financial performance in CMC's 107-year history, behind only the previous quarter."
"I am extremely proud of CMC's entire team as they continue to optimize our business, improve efficiency and deliver the high-quality service our customers have come to expect, while also advancing CMC's strategic vision."
CMC also benefited from rising prices for their products. The average selling price for steel products increased by $346 per ton compared to the second quarter of fiscal 2021, while the cost of scrap utilized rose $92 per ton.
The result was a year-over-year increase in margin over scrap of $254 per ton.
Expanding Footprint
Ms. Smith also commented on the company's new facilities in Arizona and the Eastern U.S.
Smith stated, "We look forward to building on CMC's already world-class assets and operating platform with the addition of Tensar Corporation and the commissioning of our energy efficient rebar and merchant bar-capable Arizona 2 micro mill project."
"This growth, together with our recently announced micro mill in the Eastern U.S., represents the next chapter in CMC's compelling story, which we expect will propel our organization to an even higher level of through-the-cycle earnings and return on capital."
Going into the third quarter, the company anticipates continued momentum, with elevated demand in the spring and summer from construction season.
The company also added that so far it has not experienced any disruptions to its operations, workforce, or end-market demand from the Russia-Ukraine conflict.
