Commercial Metals Company today announced financial results for its fiscal first quarter of 2017. Net earnings attributable to CMC for the three months ended November 30, 2016 were $6.3 million on net sales of $1.1 billion, compared with net earnings of $25.1 million for the first quarter ended November 30, 2015 and earnings of $25.6 million for the first quarter of fiscal 2016.
The Americas Recycling segment recorded adjusted operating loss of $5.1 million for the first quarter of fiscal 2017 compared to adjusted operating loss of $6.5 million for the first quarter of fiscal 2016.
The Americas Mills segment recorded adjusted operating profit of $36.9 million for the first quarter of fiscal 2017 compared to adjusted operating profit of $59.1 million for the corresponding period in fiscal 2016.
The Americas Fabrication segment recorded adjusted operating profit of $6.7 million for the first quarter of fiscal 2017 compared to adjusted operating profit of $21.3 million for the first quarter of fiscal 2016.
The International Mill segment recorded adjusted operating profit of $10.0 million for the first quarter of fiscal 2017 compared to adjusted operating profit of $2.8 million for the corresponding period in fiscal 2016.
The International Marketing and Distribution segment recorded adjusted operating loss of $1.0 million for the first quarter of fiscal 2017 compared to adjusted operating loss of $2.2 million for the same period in the prior fiscal year.
In a statement, the company said the second fiscal quarter has historically been slower as a result of a seasonal downturn in construction activity due to winter weather conditions and holidays. As for an outlook, CMC said several indicators point to potential improvements in market conditions during fiscal 2017:
• Non-residential construction, the company’s primary end use market in the US, has improved over the last several months. Non-residential construction spending increased 9 percent and non-residential construction starts increased 29 percent year over year for the quarter ending November 30, 2016.
• The Architectural Billings Index for the southern US, an important geography for CMC, has remained strong for the last several quarters.
• The company is optimistic about potential investments in infrastructure which may begin to develop during fiscal 2017 as a result of the Fixing America's Surface Transportation (FAST) Act.
• Ferrous scrap pricing improved during November and December 2016, which the company expects will support finished goods pricing and re-entry into the market by customers anticipating a market bottom.
• Finally, the change in the political leadership following the US elections may result in more favorable business conditions and economic growth in the medium and long terms. Potential changes in the regulatory environment related to trade, taxes, infrastructure spending and other matters may bode well for the domestic steel industry and we are well positioned to capitalize on any such changes.