Friday, Commercial Metals Co. (CMC) reported a sharp decline in profit for the fourth quarter, compared to the year-ago period on a steep fall in net sales due to lower demand. However, earnings for the quarter came in ahead of Street expectations and revenues were inline with estimates.
Commercial Metals' profit fell to $7.18 million from $63.54 million in the year-ago period. On a per share basis, net income decreased to $0.06 from $0.55. Earnings from continuing operations were $0.07 per share, compared with $0.56 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.01 for the quarter. Analysts' estimates typically exclude one-time items.
This quarter's results include an after-tax LIFO income of $24.4 million or $0.21 per share, while last year's results include an expense of $90.9 million or $0.78 per share.
Net sales declined to $1.46 billion from $3.15 billion in the prior-year period, yet met the Street consensus.
The company said that despite increases in steel production and sales volumes, demand had not picked up in the fourth quarter.
Segment-wise, Americas Recycling revenue declined to $233.70 million from $657.70 million, Americas Mills revenue plunged to $307.79 million from $576.11 million, Americas Fabrication and Distribution revenue plummeted to $441.47 million from $844.53 million, International Mills revenue decreased to $173.13 million from $400.13 million and International Fabrication and Distribution revenue fell to $522.55 million from $1.18 billion.
Total expenses declined to $1.49 billion from $3.06 million in the prior-year period.
For the full year, Commercial Metals' net profit decreased to $20.8 million from $232.0 million last year. On a per share basis, net income decreased to $0.18 from $1.97. Earnings from continuing operations were $0.17 per share, compared with $1.96 per share last year. Analysts expected the company to report earnings of $0.09 per share.
This year's results include an after-tax LIFO income of $208 million or $1.83 per share, while last year's results include an after-tax LIFO expense of $209 million or $1.78 per share.
Net sales fell to $6.8 billion from $10.4 billion a year back. Analysts expected revenues of $6.77 billion for the year.
Looking ahead, the company said that domestic market conditions are stabilizing at very modest levels, adding that growth in the Asian markets is more encouraging.
CMC stock is currently trading at $14.45, down $1.41, on the NYSE.
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