Commercial Metals Company Reports Strong Third Quarter Results for Fiscal Year 2025

Commercial Metals Company Sees Solid Growth in Third Quarter of Fiscal 2025

On June 23, 2025, Commercial Metals Company (CMC) revealed its financial outcomes for the third quarter of fiscal year 2025, concluding on May 31, 2025. The company reported a net income of $83.1 million, translating to $0.73 per diluted share, alongside adjusted earnings reaching $84.4 million, which equates to $0.74 per diluted share. Despite a dip from last year's earnings, CMC sustained a commendable performance in a favorable market environment.

Key Financial Highlights

CMC's total net sales for the quarter stood at $2.0 billion, slightly lower than the $2.1 billion from the previous year. Additionally, the consolidated core EBITDA reported was $204.1 million, reflecting a core EBITDA margin of 10.1%. The North America Steel Group experienced a notable increase in steel product margins, showcasing a stronger demand for its proprietary value-added products, particularly from its Emerging Businesses Group.

Peter Matt, the President and CEO of CMC, expressed confidence in the company’s trajectory, citing robust construction activities and healthy shipment levels. The domestic construction market demonstrated resilience, bolstered by significant exposure to the expanding U.S. infrastructure landscape. CMC is encouraged by continued bid volumes on new projects, signaling a positive outlook for upcoming quarters.

Business Segment Developments

North America Steel Group

In the North America Steel Group, demand for finished steel products saw a solid increment of 1.6% year-over-year and increased by 10.4% sequentially. Shipments remained strong, and there was a notable improvement in the average selling price of steel products, which rose by $45 per ton compared to the previous quarter. The adjusted EBITDA for this segment was $186 million, reflecting a margin decrease to 11.9% from 14.7% in the prior year. This decrease was primarily attributed to reduced margins over rising scrap costs.

Emerging Businesses Group

The Emerging Businesses Group (EBG) reported a significant uptick, with net sales reaching $197.5 million, marking a 4.7% annual growth. The segment's adjusted EBITDA rose to $40.9 million, boosting the adjusted EBITDA margin to 20.7%, up by 40 basis points compared to the previous year. CMC experienced increased demand for its Performance Reinforcing Steel, showcasing strong project-related shipments.

Europe Steel Group

The Europe Steel Group also noted improvements, exceeding breakeven due to better market conditions driven by a strong Polish economy and reduced import flows. The group witnessed a positive trend in average selling prices, which increased by $51 per ton, alongside an adjusted EBITDA of $3.6 million, a stark change from the $4.2 million loss reported in the same quarter last year.

Strategic Initiatives and Future Outlook

CMC’s Transform, Advance, Grow (TAG) program continues to gain momentum, exceeding targeted EBITDA benefits. The company anticipates that these initiatives will substantially enhance margins, cash flows, and capital returns. CMC’s strategic efforts are expected to align with broader trends in infrastructure investment, energy transition, and other emerging market drivers.

Mr. Matt articulated his optimism for the future, stating that CMC has developed a transformative strategic plan aimed at delivering sustainable improvements and creating significant shareholder value. This confidence is reinforced by the anticipated stabilization and growth in domestic construction markets, alongside a broader focus on nurturing value-accretive growth opportunities.

As the quarter closes, CMC's strong balance sheet with cash and cash equivalents totaling $893 million indicates a positive financial position. The company also announced a quarterly dividend of $0.18 per share, marking its 243rd continuous dividend payment. The webcast of the earnings call is available on their website for those interested in deeper insights.

Overall, CMC's third-quarter results reflect a strategically positioned company poised to navigate a recovering market landscape, affirming its commitment to delivering robust solutions in the global construction sector.