CMC upbeat on infrastructure stimulus
Dec 17, 2008 | 10:27 AM
| Scott Robertson
A U.S. infrastructure stimulus package would provide significant opportunities for Commercial Metals Co. (CMC) at time when it will be most needed, according to company executives.
As a very general rule of thumb, one mile of concrete highway construction uses about 100 tons of reinforcing bar per lane, so a four-lane highway construction project could consume as much as 400 tons of rebar for each mile of work, William Larson, chief financial officer of the Irving, Texas-based company, said during a conference call with analysts following the release of the company's fiscal first-quarter earnings results on Wednesday.
That's no small journey for a company like CMC, which on its steelmaking side devotes about 45 percent of its production to rebar and 55 percent to merchant products. About 40 percent of the company's production ends up in infrastructure-related projects, he said.
That means an infrastructure stimulus package such as that proposed recently by President-elect Barack Obama stands to provide a major boost to CMC in the near future. In the meantime, the company will continue to battle through a winter quarter marked by a lack of consumer confidence. The company said net profit fell 10.3 percent to $62 million in the three months to Nov. 30 due to the weakening market and the disintegration in scrap prices.....
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