Metals Co. (CMC) expects to remain in the black in its fiscal
third quarter as business activity, even in challenged markets
like the western United States and Florida, show signs of
improving, its top executive said.
"We forecast the third quarter
of 2012 to be another profitable quarter," CMC president and
chief executive officer Joseph Alvarado said Wednesday during a
conference call with analysts.
CMCs mills operated at 77
percent of capacity during the fiscal second quarter ended Feb.
29 vs. 73 percent in the year-ago period, Alvarado said.
The companys mill in Mesa,
Ariz., recorded another profitable quarter thanks in part to
improving markets in the long-beleaguered western United
States. CMC hopes to "harvest" profits from facilities like the
Arizona mill that came online during the financial crisis and
are now bearing fruit, Alvarado said.
Alvarado and CMC chief financial
officer Barbara Smith appeared cautiously optimistic about this
years prospects for its U.S. mills.
Alvarado noted a slight
improvement in commercial construction, but admitted the sector
remained nothing like it was four years ago.
"There is some optimism for
continued market recovery. All regions are reporting growth in
private-sector projects," he said. On the fabrication front,
however, as much as 70 percent of business is largely tied to
But a mild winter saw projects
across the board pulled forward, and even the troubled Florida
construction market has shown signs of life, including for
hotels and commercial space, Alvarado said. "Its hard to
believe, but there is more activity along those lines."
On the East Coast, there is more
commercial construction activity than public, he said,
stressing the importance of passing a comprehensive
transportation bill instead of temporary extensions, which
dont "move the needle" in terms of demand.
Metal margins are also
improving, CMC said. Metal margins at the companys mills
jumped to $334 per ton in the fiscal second quarter compared
with $322 per ton in the preceding quarter and $289 per ton in
the same quarter last year, Smith said.
While mills in the Americas
generally reported stronger results, CMCs adjusted
operating profits at its copper tube mill in New Market, Va.,
dwindled to $2.5 million in the fiscal second quarter from $4
million a year earlier as average copper prices fell to $4.34
per pound from $4.92 per pound, she said.
Alvarado also voiced some mild concern about rebar imports
from Turkey, noting that countries like Mexico and Turkey have
traditionally played a role in the U.S. market and will likely
again if demand continues to improve. The company will monitor
the behavior of Turkish mills and "do what we need to do" if it
sees import prices that dont make sense, he added.