Commercial Metals Co (CMC) Q3 Earnings Miss Estimates with EPS of $1.02, Revenue Beats at $2.08 Billion

Q3 Earnings Fall Short of Expectations Amid Market Challenges

  • Net Earnings: $119.4 million, or $1.02 per diluted share, compared to $233.97 million, or $1.98 per diluted share, in the prior year period.
  • Revenue: $2.08 billion, exceeding analyst estimates of $2.03 billion.
  • Core EBITDA: $256.1 million with a core EBITDA margin of 12.3%, reflecting solid seasonal demand and strong operational performance.
  • North America Steel Group: Adjusted EBITDA of $246.3 million, down from $367.6 million in the prior year period, driven by lower margins over scrap costs.
  • Europe Steel Group: Adjusted EBITDA loss of $4.2 million, showing improvement despite challenging market conditions.
  • Emerging Businesses Group: Net sales of $188.6 million, unchanged year-over-year, with adjusted EBITDA of $38.2 million, up 20.9% sequentially.
  • Share Repurchase: 931,281 shares repurchased during the quarter, valued at $51.8 million, with $458.6 million remaining under the current authorization.
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On June 20, 2024, Commercial Metals Co (CMC, Financial) released its 8-K filing for the third quarter of fiscal 2024, revealing net earnings of $119.4 million, or $1.02 per diluted share, on net sales of $2.1 billion. This performance fell short of analyst estimates, which projected earnings per share (EPS) of $1.09 and revenue of $2.034 billion.

Company Overview

Commercial Metals Co operates steel mills, steel fabrication plants, and metal recycling facilities in the United States and Europe. The company manufactures rebar and structural steel, which are essential for the nonresidential construction sector. CMC's operations are divided into two reportable segments: North America and Europe.


Performance and Challenges

Despite solid seasonal demand and strong market fundamentals in North America, CMC's Q3 performance was impacted by lower margins and increased costs. The company's net earnings of $119.4 million, or $1.02 per diluted share, were significantly lower than the $234.0 million, or $1.98 per diluted share, reported in the same period last year. Revenue also declined from $2.3 billion to $2.1 billion year-over-year.

Financial Achievements

CMC reported consolidated core EBITDA of $256.1 million, with a core EBITDA margin of 12.3%. The North America segment showed healthy shipment volumes and product margins, supported by a robust pipeline of new construction projects. The Europe Steel Group achieved near breakeven results, reflecting improved performance despite a challenging market environment.

Income Statement Highlights

Metric Q3 2024 Q3 2023
Net Sales $2.1 billion $2.3 billion
Net Earnings $119.4 million $234.0 million
Earnings Per Share (Diluted) $1.02 $1.98

Balance Sheet and Cash Flow

As of May 31, 2024, CMC's balance sheet remained strong, with cash and cash equivalents totaling $698.3 million and available liquidity of nearly $1.5 billion. The company repurchased 931,281 shares of common stock valued at $51.8 million during the quarter. Additionally, the board of directors declared a quarterly dividend of $0.18 per share, marking a 13% increase year-over-year.

Segment Performance

In North America, finished steel shipments increased by 12.3% sequentially but were down modestly compared to the prior year. The adjusted EBITDA for the North America Steel Group decreased to $246.3 million from $367.6 million in the prior year period, driven by lower margins over scrap costs. The Europe Steel Group reported an adjusted EBITDA loss of $4.2 million, showing improvement from previous quarters.


"Our business continued to generate strong financial results during the third quarter, with core EBITDA, core EBITDA margin, cash flows, and net earnings all at levels well above long-term averages," said Peter Matt, President and Chief Executive Officer. "Fundamentals remain good within our North American markets, supporting stable to modestly improving steel product margins, healthy shipment levels, and steady downstream backlog volumes."


Commercial Metals Co's Q3 fiscal 2024 results highlight the company's resilience amid market challenges. While the earnings missed analyst estimates, the company's strong balance sheet and liquidity position provide a solid foundation for future growth. The ongoing ramp-up of the Arizona 2 micro mill and the development of the fourth micro mill in West Virginia are expected to drive long-term growth in earnings, cash flow, and shareholder value.

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Explore the complete 8-K earnings release (here) from Commercial Metals Co for further details.