Irving-based Commercial Metals Company reports second best quarter ever

by PegNews wire

IRVING — Commercial Metals Company today reported net earnings of $355.4 million or $2.92 per diluted share on net sales of $8.3 billion for the year ended August 31, 2007. This compares with net earnings of $356.3 million or $2.89 per diluted share on net sales of $7.2 billion last year. The company's net earnings return on beginning equity was 29.1%.

Fourth quarter net earnings were $104.7 million or $0.86 per diluted share on net sales of $2.3 billion. This compares with $128.7 million or $1.04 per diluted share on net sales of $2.2 billion in the fourth quarter a year ago.

Murray R. McClean, President & CEO, said, "Backed by record fourth quarters from our Domestic Fabrication and Marketing & Distribution segments, we achieved our second best quarter ever, eclipsed only by last year's all- time record fourth quarter. Though not at record levels, our Recycling segment had its best quarter of the fiscal year, and CMCZ finished its best year ever. Operating profit for our Domestic Mills segment was lower, primarily on account of lower production and shipments. The service centers continued destocking reduced shipments, most notably merchant bar. The housing slump had some impact on rebar shipments, particularly in the southeast, although nonresidential construction in the U.S. continued at strong levels. In addition, record rainfall in Texas slowed rebar shipments to construction sites. Steel imports have been a factor, but these declined significantly by quarter end. Internationally, most markets remained strong although slower due to the summer holiday period. The overhang of rebar inventories, mainly steel imports, caused by very robust market conditions in the first two quarters of calendar 2007 impacted many European markets including Poland."

McClean continued, "The prospects are very good for another strong year for CMC in 2008. We believe the year will be typical with a good first quarter followed by a slower second quarter (winter months) and then a strong finish in the third and fourth quarters. The housing market slump and the more recent sub prime mortgage crisis/credit squeeze have slowed the U.S. economy. The global economies remain relatively solid, although in Europe there are some signs of slowing growth. Nonresidential construction remains strong in the U.S. and in most global markets. This is the key driver for our business."

Source: Commercial Metals Company