Commercial Metals Company announced financial results for its first quarter ended November 30, 2017. Net earnings for the first quarter of fiscal 2018 were $36.8 million on net sales of $1.2 billion. This compares to net earnings of $6.3 million on net sales of $1.0 billion for the first quarter of fiscal 2017.
The company’s Americas Recycling segment recorded adjusted operating profit of $9.9 million for the first quarter of fiscal 2018 compared to an adjusted operating loss of $5.1 million for the first quarter of fiscal 2017. In a press release, CMC said the improvement in adjusted operating profit compared to the same period in fiscal 2017 was primarily the result of strong volumes and non-ferrous prices which rose during the quarter. Shipment volumes in comparison to the same period of the prior fiscal year increased by 44 percent as a result of higher domestic steel manufacturing utilization rates and the impact of the acquisition of yards completed during fiscal 2017.
The Americas Mills segment recorded adjusted operating profit of $40.8 million for the first quarter of fiscal 2018 compared to adjusted operating profit of $36.9 million for the corresponding period in fiscal 2017. CMC said it had a strong shipping quarter as non-residential construction activity remains high. While metal margins were relatively flat in comparison to the same period in the prior fiscal year, the company said, they increased for the second consecutive fiscal quarter and were $14 per ton higher than the fourth quarter of fiscal 2017.
The Americas Fabrication segment recorded an adjusted operating loss of $4.8 million for the first quarter of fiscal 2018 compared to adjusted operating profit of $6.7 million for the first quarter of fiscal 2017. According to the press release, the average selling price for the Americas Fabrication segment was similar to the same period of fiscal year 2017; however, the company noted that raw material rebar prices have increased resulting in the losses suffered during the recent quarters. CMC said it is experiencing strong bidding activity for fabrication work, but strong competitive pressures and the availability of low cost import material have not provided a market dynamic for the increased raw material costs to be passed on to customers in the form of increased selling prices.
As for an outlook on fiscal Q2, CMC President and CEO Barbara Smith commented, "During our second quarter we normally experience lower shipment levels due to winter weather conditions impairing construction activity as well as a reduced number of shipping days. However, we see strength in the underlying market fundamentals supporting each of our segments as we enter calendar 2018. End markets in both non-residential construction and original equipment manufacturers are forecasting growth and we are seeing that reflected in our shipment volumes."