CMC Reports First Quarter of Fiscal 2026 Results

Core Insights - Commercial Metals Company (CMC) reported strong financial results for the first quarter of fiscal 2026, achieving net earnings of $177.3 million, or $1.58 per diluted share, compared to a net loss of $175.7 million in the prior year period [2][5][23] - The company experienced significant year-over-year improvements in adjusted earnings, which reached $206.2 million, or $1.84 per diluted share, up from $86.9 million, or $0.76 per diluted share, in the previous year [3][5][23] - CMC's strategic initiatives, including the TAG program and recent acquisitions, are expected to enhance margins and earnings power, with a goal of achieving an annualized run-rate EBITDA benefit of $150 million by the end of fiscal 2026 [2][5][14] Financial Performance - First quarter net sales totaled $2.1 billion, a 11% increase from $1.9 billion in the prior year [5][23] - Consolidated core EBITDA for the first quarter was $316.9 million, reflecting a 52% increase year-over-year, with a core EBITDA margin of 14.9% [5][9][22] - The North America Steel Group's adjusted EBITDA increased by 57.9% to $293.9 million, driven by higher margins and operational improvements [9][22] Market Conditions - The domestic market environment for CMC's North America Steel Group and Construction Solutions Group remained stable, characterized by solid demand and expanding margins [2][7] - Steel product metal margins increased for the third consecutive quarter, reaching their highest level in nearly three years, with potential for further increases based on favorable market dynamics [2][8] - The Europe Steel Group faced modestly softened market conditions, with adjusted EBITDA declining to $10.9 million from $25.8 million in the prior year, impacted by lower average selling prices and margins [12][13] Strategic Initiatives - CMC successfully completed acquisitions of Concrete Pipe and Precast, LLC and Foley Products Company, establishing a new growth platform in the precast concrete industry with over $2.5 billion deployed [2][5][4] - The company launched several new operational and commercial initiatives under the TAG program, aimed at expanding margins and enhancing service value [2][5] - The Emerging Businesses Group has been renamed to Construction Solutions Group to better align with the strategic priorities of the segment [10][11] Outlook - CMC anticipates a modest decline in consolidated core EBITDA for the second quarter of fiscal 2026 due to seasonal slowdowns, but expects contributions from the newly acquired precast businesses to offset some of this impact [14] - The long-term outlook remains positive, with expectations of significant value creation for shareholders through strategic execution and operational excellence [14]