NEW YORK Commercial Metals Co. (CMC) saw sales and shipments fall in its fiscal third quarter compared with the same period last year, particularly in its U.S. mill segment, but it remained profitable.
The Irving, Texas-based company posted net income of $18.96 million for the three months ended May 31, down 53.4 percent from $40.68 million a year earlier on sales that slid 10.6 percent to $1.79 billion.
The weakest performance was by CMCs U.S. mills segment, which saw a 19.9-percent decrease in quarterly operating earnings to $47.51 million from $59.28 million a year ago on net sales that fell 10.9 percent to $503.69 million from $565.13 million.
Mill rebar shipments in the fiscal third quarter improved slightly from a year ago, increasing 3.4 percent to 369,000 tons from 357,000 tons, but merchant and other structural product shipments fell 19.8 percent to 271,000 tons from 338,000 tons. Margins on merchant products were lower to due to import pressure, while rebar margins improved compared with the same period last year.
"We experienced improvements over the second quarter of fiscal 2013 in all of our business segments except our Americas Mills segment," CMC president and chief executive officer Joe Alvarado said in a statement. "On a year-over-year basis, a modest improvement in rebar shipments was more than offset by weaker shipment levels of merchant and light structural products contributing to lower levels of profitability in our Americas Mills segment."
CMC saw a stronger performance by its U.S. fabrication segment due to improved selling prices, with operating earnings soaring to $13.5 million from $199,000 a year ago on sales that inched up 1.2 percent to $383.8 million from $379.33 million despite a 7-percent fall in shipments to 277,000 tons from 298,000 tons.
"We are pleased with the improved financial performance of our Americas Fabrication segment recording its best adjusted operating profit since the fourth quarter of fiscal 2009," Alvarado said. "Furthermore, the Americas Fabrication segment has reported positive adjusted operating profit for four of the last five quarters."
Alvarado said the company expects similar results in its fiscal fourth quarter, with nonresidential construction seeing some regional improvement but nationwide recovery still lagging.