Commercial Metals swings to profit

Dec 21, 2010 | 12:52 PM | Lisa Gordon

Commercial Metals Co. on Tuesday reported a fiscal first-quarter profit of $700,000, reversing a $31.2-million loss in the year-ago period.

The Irving, Texas-based company, which reported sales of $1.8 billion in the quarter compared with $1.4 billion in the year-ago period, said the midterm election results and higher scrap prices are expected to bring improved demand, better selling prices and a heavier order book in what historically is the slowest period of the year for the company.

"Rebar price increases are already in effect, and increasing ferrous scrap pricing likely will continue to apply upward pressure. Fabrication backlogs normally decline in this period; however, they are likely to trend upwards at higher prices, which overall should be positive," said Murray R. McClean, chairman, president and chief executive officer.

But the uptick in conditions could be short-lived, McClean cautioned. "The trend appears to be for continuing higher prices early in the quarter, though a pullback by spring could be expected," he said, noting that the producer will likely report a small loss in the next quarter despite better demand and selling prices.....