Commercial Metals Q4 Earnings Beat Estimates, Sales Rise Y/Y

Commercial Metals Company CMC reported earnings per share (EPS) of $1.35 for the fourth quarter of fiscal 2025 (ended Aug. 31, 2025) compared with 90 cents in the year-ago quarter. Adjusted for one-time items, the earnings came in at $1.37. The bottom line beat the Zacks Consensus Estimate of $1.32. 

Net sales in the reported quarter were around $2.11 billion, up 5.9% year over year. The reported figure beat the Zacks Consensus Estimate of $2.04 billion.

The cost of goods sold in the quarter was up 2.9% from the year-ago quarter to $1.72 billion. The gross profit was up 21.6% from the year-ago quarter to $393 million during this period. The core EBITDA was $291 million in the fiscal fourth quarter, up 32.9% from the year-ago quarter.

Commercial Metals’ Q4 Segment Performances

The North America Steel Group segment generated net sales of $1.62 billion in the fiscal fourth quarter compared with $1.56 billion in the year-ago quarter. We expected net sales of $1.61 billion for the quarter. The segment registered an adjusted EBITDA of $239 million compared with the year-ago quarter’s $203 million. Our model predicted an adjusted EBITDA of $228 million.

The Europe Steel Group segment’s revenues were $263 million, up 18.5% from the year-ago quarter. Our model predicted net sales of $227 million. The adjusted EBITDA was $39 million in the fiscal fourth quarter against the year-ago quarter’s negative $3.6 million. We expected an adjusted EBITDA of $5.2 million for the quarter.

The Emerging Businesses Group segment generated net sales of $222 million in the fiscal fourth quarter compared with $195.5 million in the year-ago quarter. We expected net sales of $169 million for the quarter. The segment registered an adjusted EBITDA of $50.6 million, up 19.1% year over year. Our model predicted an adjusted EBITDA of $58 million.

CMC’s FY25 Performance

Commercial Metals reported adjusted earnings per share of $3.13 for fiscal 2025, marking a 24% decline from $4.13 in fiscal 2024. The bottom line beat the Zacks Consensus Estimate of $3.09. 

Revenues dropped 1.6% year over year to $7.79 billion in fiscal 2025, beating the Zacks Consensus Estimate of $7.75 billion.

Commercial Metals’ Q4 Cash Flow & Balance Sheet Updates

CMC reported cash and cash equivalents of $1.04 billion at the end of fiscal 2025 compared with $0.86 billion at the end of fiscal 2024. The company’s long-term debt was $1.31 billion at the end of fiscal 2025 compared with $1.15 billion at the end of fiscal 2024. Cash generated from operating activities was $715 million in fiscal 2025 compared with $899.7 million in the last fiscal year.

CMC’s Other Updates

The company announced on Thursday that it has inked a definitive agreement to acquire Foley Products Company for $1.84 billion in cash. Along with the pending CP&P acquisition, this deal will expand the company’s commercial portfolio into mission-critical precast applications. It will establish CMC as the third-largest player in the United States, with a significant presence in the Mid-Atlantic and Southeast regions.

CMC expects the deal to be immediately accretive to EPS and free cash flow per share. By the end of year three, annual run-rate synergies are expected to be between $25 million and $30 million of EBITDA.

In mid-September, CMC announced that it had inked a definitive agreement with Eagle Corporation and ECPP, LLC to acquire Concrete Pipe & Precast, LLC ("CP&P"). This move will help Commercial Metals expand its early-stage construction solutions portfolio.

The deal is projected to be immediately accretive to CMC’s EPS and free cash flow per share. By the third year of completion, annual run-rate synergies from the transaction are expected to be between $5 million and $10 million, primarily related to optimization initiatives.

Commercial Metals’ FY26 Outlook

The company expects finished steel shipments within the North America Steel Group to follow normal seasonal trends in the first fiscal quarter of 2026. The adjusted EBITDA margin of the segment will rise sequentially, driven by higher steel product margins over scrap. 

In the Emerging Businesses Group, results are expected to be down sequentially due to seasonality but increase on a year-over-year basis. Meanwhile, Europe Steel Group’s adjusted EBITDA is likely to remain near breakeven. Overall, financial results in the first quarter of fiscal 2026 are expected to be in line with the fourth quarter results.

CMC’s Share Price Outperforms Industry

Shares of the company have lost 0.5% in the past year against the industry’s growth of 5.5%.

Commercial Metals’ Zacks Rank

Commercial Metals currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Steel-Producers Stocks Awaiting Results

L.B. Foster Company FSTR is expected to release its third-quarter 2025 results soon.

The Zacks Consensus Estimate for FSTR’s EPS is pegged at 61 cents for the third quarter, suggesting growth from the 54 cents reported in the year-ago quarter. For total revenues, the Zacks Consensus Estimate is pinned at $153.6 million, indicating a year-over-year increase of 11.7%.

Gerdau S.A. GGB is expected to release third-quarter 2025 results on Oct. 30.

The Zacks Consensus Estimate for GGB’s EPS is pegged at 12 cents for the third quarter, suggesting a dip of 7.7% from the year-ago reported figure. For total revenues, the Zacks Consensus Estimate is pinned at $3.2 billion, indicating a year-over-year increase of 4%.

Ternium S.A. TX is expected to release third-quarter 2025 results soon.

The Zacks Consensus Estimate for TX’s EPS is pegged at 81 cents for the fiscal third quarter, suggesting a rise from 16 cents reported in the year-ago period. For total revenues, the Zacks Consensus Estimate is pinned at $3.99 billion, indicating a year-over-year decrease of 10.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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