Commercial Metals Co (CMC) Q4 2024 Earnings Call Highlights: Navigating Market Challenges and ...

GuruFocus News
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In This Article:

  • Core EBITDA: $1 billion for fiscal 2024, down from $1.4 billion in fiscal 2023.

  • Core EBITDA Margin: 12% for fiscal 2024.

  • Cash Flow from Operating Activities: $900 million for fiscal 2024.

  • Shareholder Returns: $261.8 million returned through share repurchases and dividends in fiscal 2024, a 48% increase from fiscal 2023.

  • Fourth Quarter Revenue: $2 billion.

  • Fourth Quarter Net Earnings: $103.9 million or $0.90 per diluted share.

  • Fourth Quarter Consolidated EBITDA: $227.1 million.

  • Fourth Quarter Core EBITDA Margin: 11.4%.

  • Return on Invested Capital: 10% trailing 12 months.

  • North American Steel Group Adjusted EBITDA: $210.9 million for the fourth quarter.

  • Europe Steel Group Adjusted EBITDA Loss: $3.6 million for the fourth quarter.

  • Emerging Business Group Fourth Quarter Net Sales: $195.6 million.

  • Emerging Business Group Fourth Quarter Adjusted EBITDA: $42.5 million.

  • Cash and Cash Equivalents: $857.9 million as of August 31.

  • Total Liquidity: Just under $1.7 billion.

  • Fourth Quarter Cash from Operating Activities: $351.8 million.

  • Capital Expenditures: $81.5 million for the fourth quarter.

  • Net Debt to EBITDA Ratio: 0.3 times.

  • Net Debt to Capitalization: 6%.

  • Effective Tax Rate: 22.3% for the fourth quarter, 23.6% for the full year.

  • Fiscal 2025 Capital Spending Outlook: $630 million to $680 million.

Release Date: October 17, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Commercial Metals Co (NYSE:CMC) achieved record employee safety performance in fiscal 2024, marking the lowest incident rate in the company's history.

  • Fiscal 2024 was one of the best financial years for CMC, with core EBITDA of $1 billion, which is 40% above any pre-pandemic year.

  • CMC returned $261.8 million to shareholders through share repurchases and dividends, a 48% increase from fiscal 2023.

  • Significant progress was made on strategic growth projects, including advancements at the Arizona 2 micro mill and the West Virginia site.

  • The TAG initiative is expected to drive sustained margin enhancement and earnings growth, with financial benefits anticipated to start in fiscal 2025.

Negative Points

  • Core EBITDA declined from $1.4 billion in fiscal 2023 to $1 billion in fiscal 2024, indicating a decrease in profitability.

  • The North America Steel Group faced weaker market sentiment, negatively impacting long steel pricing and margins.

  • The Europe Steel Group continued to face challenges with increased imports from neighboring countries, leading to near breakeven results.

  • Uncertainty in the construction market due to interest rate fluctuations and the upcoming US Presidential election has led to hesitancy among project owners.

  • The fiscal 2025 outlook anticipates a decline in financial results in the first quarter due to temporary softness in the construction industry.

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