NEW YORK Commercial Metals Co.
(CMC) saw a sharp decrease in profits in its fiscal
second-quarter 2013 on the back of slower U.S. scrap and steel
business activity, but the company expects to see a pickup in
domestic business in the second half.
The Irving, Texas-based
steelmakers net income fell 84.1 percent year over year
to $4.6 million in the three months ended Feb. 28 on revenues
that declined to $1.73 billion vs. $1.96 billion in the same
quarter of 2012.
Sales in the companys
Americas Recycling segment fell 16.3 percent to $351.4 million
over the same period a year earlier, while sales in its
Americas Mills segment dropped 9.4 percent to $476.6 million in
the same comparison.
The lower revenues came as steel
prices and shipment volumes pulled back in the quarter. The
Americas Mills divisions average f.o.b. steel selling
price dropped to $682 per ton in the second quarter, compared
with $726 per ton in the same period a year prior, although
with scrap prices also down, the units metal margins were
largely unchanged at $332 per ton vs. $334 per ton in the same
quarter last year.
Meanwhile, total rebar,
structural and other steel shipments from the division declined
to 602,000 tons in the second quarter, down from 644,000 tons a
year earlier, while the International Mill divisions
shipments fell to 277,000 tons from 331,000 tons
However, CMC chairman, president
and chief executive officer Joseph Alvarado said he remained
optimistic that construction will pick up in the second half of
the year, resulting in improved earnings.
"Our third quarter historically
yields better results as the construction season begins to ramp
up. The American Institute of Architects reported an
Architecture Billings Index (ABI) of 54.9 in February 2013, the
highest level in over five and a half years," Alvarado said in
a statement. "We believe that the ABI level will eventually
translate into increased demand for our domestic