Commercial Metals Company (CMC) missed analysts’ expectations on earnings for the first quarter of 2019 while revenues came in line with estimates. The stock dropped over 6% in premarket hours on Monday.
Total sales rose to $1.3 billion from $1.1 billion in the same period last year. On a GAAP basis, net earnings were $19.7 million or $0.17 per share compared to $36.8 million or $0.31 per share in the prior-year quarter.
GAAP earnings from continuing operations were $19.4 million or $0.16 per share. The GAAP earnings results include after-tax expenses of $22.1 million related to certain non-operational costs. Adjusted earnings from continuing operations were $41.5 million or $0.35 per share.
During the quarter, CMC saw year-over-year sales increases across all its business segments with the exception of Americas Recycling. The company completed a major rolling mill overhaul in Poland and managed to deliver record levels of seasonally adjusted profits even as shipments in the US were negatively impacted by wet weather.
CMC also closed the acquisition of certain rebar assets from Gerdau, which contributed around $12.5 million of operating income in the first partial month of ownership, after excluding certain charges. The integration of these assets have progressed well giving the company optimism on their accretive nature and synergy potential.
Barbara R. Smith, Chairman, President and CEO said, “We remain optimistic about the demand outlook in our key markets. Our second quarter of fiscal 2019 will include normal seasonality, which will reduce shipment rates at our facilities; however we expect the quarter to be strong in comparison to historical second quarter results, due to the contribution from our strategic growth initiatives. We expect to see continued growth from our investment in the new Durant, OK micro mill, as well as growth from the ongoing integration of the newly acquired rebar assets. We are confident that these will position us well to serve our customers in this period of strong demand and deliver enhanced returns to our shareholders.”
On January 2, the board of directors declared a quarterly dividend of $0.12 per common share, payable on January 30, 2019 to stockholders of record on January 15, 2019.
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