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CMC Misses Q3 Profit Estimates but Sees Growth from TAG Program, Rising Steel Margins
CMC posts $83.1M in Q3 profit and $2.02B in revenue; steel margin tailwinds and strategic efficiencies support future growth.
Commercial Metals Co. (NYSE: CMC) on Monday reported fiscal third-qu arter net income of $83.1 million, or 73 cents per share, falling short of Wall Street expectations.
On an adjusted basis—excluding one-time gains and costs—earnings came in at 74 cents per share, below the 85-cent consensus estimate from three analysts surveyed by Zacks Investment Research.
Despite the earnings miss, the Irving, Texas-based steel and metal products manufacturer and recycler beat revenue expectations, posting $2.02 billion for the quarter versus a forecast of $2.01 billion.
The company noted that steel product metal margins in North America inflected upward during the period, exiting the quarter above the $499 per ton average.
“We achieved sequential improvement in our financial performance driven by better market conditions across each of our segments,” said Peter Matt, President and Chief Executive Officer. “This includes a meaningful tailwind from the upward inflection of steel product metal margins within the North America Steel Group and solid demand for the proprietary value-added products offered by our Emerging Businesses Group.”
The Emerging Businesses Group reported higher profitability both sequentially and year-over-year, with adjusted EBITDA margin rising to 20.7%. Meanwhile, the Europe Steel Group surpassed breakeven levels due to improved market fundamentals and cost discipline.
Matt highlighted the success of the company’s Transform, Advance, Grow (TAG) program, calling it a “key pillar” of CMC’s growth strategy. “Benefits related to TAG have exceeded our targets through the first three quarters of fiscal 2025,” he said. “We are increasingly confident in the ability of this program to drive sustained improvements to margins, cash flow, and returns on capital.”
The company’s shares remained unchanged in pre-market trading following the earnings release. CMC stock is currently up about 5% year-to-date.
Looking ahead, the company expects fourth-quarter consolidated results to improve over Q3. Finished steel shipments in North America are anticipated to follow normal seasonal trends, with adjusted EBITDA margin forecasted to increase due to stronger steel product margins relative to scrap.
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