Commercial Metals Company (CMC) Earnings & Analysis

Latest quarter

Commercial Metals reported Q4 FY2026 revenue of $2.7 billion, above the consensus of $2.4 billion and up from $2.1 billion a year earlier. Adjusted earnings per share, as counted by the consensus, were $2.09 against an estimate of $1.97. The company reported diluted earnings per share of $1.91, compared with $1.35 a year earlier.

CFO Paul Lawrence said North America Steel Group benefited from improved metal margins and merchant bar shipments. He also reported year-over-year sales growth in Construction Solutions, where the acquired precast business contributed to results. CEO Peter Matt said residential softness in parts of the Southeast weighed on precast volumes and margins.

CMC reported a gross margin of 18.9%, compared with 18.6% a year earlier, and an operating margin of 10.2%, compared with 10.1%. Free cash flow was $286.6 million, up from $206.6 million.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Peter Matt said infrastructure funding was supporting a multiyear project pipeline, while nonresidential demand varied by market. He identified data centers, power generation, utilities and institutional projects as sources of activity, and said residential construction remained muted.

CFO Paul Lawrence said North American steel margins improved sequentially as selling prices rose and scrap costs fell. He attributed part of the price improvement to a product mix that included more merchant bar, which carried a premium to rebar. Lawrence said the downstream backlog increased 15.5% year over year.

Asked about precast performance, Matt attributed the shortfall to residential volume weakness in the Southeast. He said volumes elsewhere had nearly offset the regional decline, but the businesses had different margins, magnifying the earnings effect. Nonresidential and infrastructure work had filled in the backlog, he said. In prepared remarks, Matt reported that precast bookings rose 12.6% sequentially and said integration and synergy capture were on track.

On competition, Matt said the economics of shipping South Korean rebar to the United States had become less competitive with CMC’s pricing. He said the company would monitor imports and pursue trade-law violations. For Europe, Lawrence said steel pricing had improved, although energy costs had risen; Matt said demand in Poland was good but described the German economy’s recovery as a caution.

Matt said commissioning was progressing at the West Virginia mill and that the facility would give CMC more flexibility over its product mix. Asked about the ramp-up, Lawrence said he expected production to be a little under 200,000 tons in fiscal 2027. Lawrence also said CMC intended to accelerate repurchases under its existing authorization. For the quarter ahead, Matt pointed to seasonal factors and costs across the portfolio.

Guidance

For the first quarter, Peter Matt said normal seasonal factors and costs would affect results sequentially. He expected improved pricing in North America to largely offset higher scrap costs and startup expenses, while Europe would benefit from improving operating conditions and a CO2 credit.