Commercial Metals Q2 revenue slightly beats, raises dividend
Overview
U.S. steel and construction solutions provider's fiscal Q2 revenue slightly beat analyst expectations
Adjusted EPS for fiscal Q2 missed analyst expectations
Company repurchased shares and raised quarterly dividend by 11%
Outlook
Company expects consolidated core EBITDA in Q3 to increase meaningfully from Q2 levels
Construction Solutions Group financial results expected to nearly double in Q3 vs Q2
Company anticipates precast business will generate $165 mln to $175 mln EBITDA for full yr
Result Drivers
TAG PROGRAM & EXECUTION - Co said strong execution and additional efficiency gains from its enterprise-wide Transform, Advance, Grow (TAG) program drove core EBITDA growth
PRECAST ACQUISITIONS - Newly acquired precast platform contributed $33.6 mln to segment adjusted EBITDA, driving growth in Construction Solutions Group
HIGHER STEEL MARGINS - North America Steel Group benefited from higher margins over scrap costs and improved average selling prices, offset partly by weather disruptions
Company press release: ID:nPn5RryJNa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Slight Beat* | $2.13 bln | $2.09 bln (8 Analysts) |
Q2 Adjusted EPS | Miss | $1.16 | $1.30 (8 Analysts) |
Q2 EPS |
| $0.83 |
|
Q2 Adjusted Net Income | Miss | $130.10 mln | $147.17 mln (5 Analysts) |
Q2 Net Income |
| $93 mln |
|
Q2 Core EBITDA | Beat | $297.50 mln | $286.29 mln (9 Analysts) |
Q2 Adjusted EBITDA Margin |
| 14.00% |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the iron & steel peer group is "buy"
Wall Street's median 12-month price target for Commercial Metals Co is $84.25, about 35% above its March 25 closing price of $62.41
The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 11 three months ago
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