Commercial Metals Co. (NYSE:CMC) on Thursday delivered a sharp first-quarter earnings beat on stronger steel margins and construction demand, but warned that near-term profits are likely to cool as acquisition costs and seasonal pressures weigh on results, sending the stock lower in early trading.
The company reported fiscal first-quarter net earnings of $177.3 million, or $1.58 per diluted share, and adjusted earnings of $206.2 million, or $1.84 per diluted share, for the period ended Nov. 30, 2025.
Net sales increased to $2.120 billion from $1.910 billion a year earlier. Adjusted EPS of $1.84 beat an analyst estimate of $1.56, and revenue topped an estimate of $2.057 billion.
Consolidated core EBITDA was $316.9 million, up approximately 52% year over year, with a core EBITDA margin of 14.9%. CMC recorded net after-tax charges of $28.9 million, primarily tied to CP&P and Foley acquisition-related expenses. The prior-year quarter included a net after-tax charge of $265.0 million related to that litigation verdict.
North America Steel Group’s steel product shipments totaled 795 thousand tons, compared to 790 thousand tons a year ago and 788 thousand tons in the prior quarter. Adjusted EBITDA rose 57.9% to $293.9 million, and adjusted EBITDA margin increased to 17.7% from 12.3%. The company said steel product margins increased by $53 per ton sequentially.
Construction Solutions Group posted net sales of $198.3 million, up 17.0%, and adjusted EBITDA of $39.6 million, up 74.7%, for an adjusted EBITDA margin of 20.0%.
Europe Steel Group adjusted EBITDA declined to $10.9 million from $25.8 million, and adjusted EBITDA margin fell to 4.4% from 12.3%, driven by a CO2 credit of $15.6 million versus $44.1 million, and maintenance outages.
CMC reported cash, cash equivalents, and restricted cash of $3.0 billion as of Nov. 30, 2025, and available liquidity of nearly $1.9 billion. Operating cash flow was $204.2 million, and long-term debt totaled $3.305 billion.
The company repurchased 663,220 shares for $38.9 million, with $166.1 million remaining under its authorization. It also declared a quarterly dividend of 18 cents per share, payable on February 2, 2026.
Outlook
Peter Matt, President and Chief Executive Officer, said, "We expect consolidated core EBITDA in the second quarter of fiscal 2026 to decline modestly from first quarter levels," and said Europe Steel Group adjusted EBITDA is expected to be approximately breakeven, with margin growth potential later in fiscal 2026, "when the Carbon Border Adjustment Mechanism (CBAM) takes full effect."
The company will recognize several acquisition-related expenses during the second quarter, including transaction fees, debt issuance costs, and customary purchase accounting adjustments, each of which will be excluded from Core EBITDA.
North America Steel Group’s adjusted EBITDA is expected to decline sequentially due to seasonality and maintenance, while steel product margins are expected to remain relatively stable, and Construction Solutions Group’s results are expected to improve with contributions from the precast business.
CMC Price Action: Commercial Metals shares were down 3.61% at $70.58 during premarket trading on Thursday. The stock is trading near its 52-week high of $75.03, according to Benzinga Pro data.
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