Commercial Metals Company (CMC) reported Wednesday that in its fiscal Q4 (ended August 31, 2012), earnings totaled $30.2 million on net sales of $1.9 billion, a significant improvement compared to a net loss of $120.3 million in Q4 2011. Net earnings for the year ended August 31, 2012 represent the fifth-best full year performance in CMC's nearly 100 year history at $207.5 million on sales of $7.8 billion. The fiscal year 2012 performance compares to a net loss of $129.6 million on sales of $7.9 billion for the same period last year.
All of CMC's various segments were profitable in Q4, with Americas Recycling recording an adjusted operating profit of $8.3 million. However, due to oversupply and reduced export demand, ferrous scrap prices rapidly declined in the first two months of Q4 before partially recovering in August. Joe Alvarado, CMC's President and CEO commented during the question and answer session that the company anticipates higher scrap prices this winter, and there's "a lot of whisper talk" as to whether the price turnaround will take place in November. Most believe there won't be a further fall in scrap prices as flows have been compromised, impacting scrap availability.
CMC's Americas Mills recorded an operating profit of $62.3 million, $16.7 million more than last year's Q4. The Americas Fabrication segment recorded an adjusted operating profit of $1.5 million in Q4, marking a significant improvement of $44.3 million over last year's fourth quarter adjusted operating loss of $42.8 million. The International Mill segment had an adjusted operating profit of $5.4 million for Q4 compared to an adjusted operating profit of $14.6 million during last year's fourth quarter.
The International Marketing and Distribution segment recorded an adjusted operating profit of $1.5 million during Q4 compared to an adjusted operating profit of $22.7 million for last year's fourth quarter. Within this segment, the reduced profitability is primarily due to reduced demand in some key products marketed by the raw materials division. Uncertainty around the outcome of economic stimulus in China is weighing on this division's results. Furthermore, CMC's European trading division experienced lower volumes and margins as a result of the continued Euro zone market conditions.