Commercial Metals (CMC 24.00, +1.23) has climbed 5.4% in pre-market after beating expectations for the first quarter. The upbeat earnings report follows yesterday's announcement, in which the company revealed the acquisition of certain U.S. rebar steel mill and fabrication assets from Gerdau S.A. (GGB 4.00, +0.06) for $600 million.
The company, which operates recycling centers, steel mills, fabrication facilities, heat treating facilities, and construction-related product stores, reported above-consensus first quarter earnings from continuing operations of $0.32 per share on a 24.6% year-over-year jump in revenue to $1.24 billion, which was also ahead of market expectations.
Looking at the segment breakdown, Americas Recycling revenue jumped 80.7% to $319.33 million. The segment recorded an operating profit of $9.93 million, up from a loss of $5.10 million one year ago. The improvement was owed to strong volumes and non-ferrous prices, which increased during the quarter. Shipment volumes grew 44.0% year-over-year.
Americas Mills revenue increased 19.1% to $413.52 million while segment operating profit rose 10.3% to $40.76 million. The company noted that continued strength in non-residential construction fueled shipment growth.
Americas Fabrication revenue declined 1.7% to $332.78 million and the segment recorded an operating loss of $4.78 million, down from a profit of $6.71 million one year ago. Average selling price was little changed year-over-year, but raw material rebar prices increased.
International Mill revenue jumped 64.0% to $220.47 million while segment operating profit spiked 134.6% to $23.39 million. Shipments increased 27.0% year-over-year and construction activity remained strong.
Marketing and Distribution revenue declined 2.1% to $163.30 million, but the segment swung to an operating profit of $10.53 million from an operating loss of $3.76 million one year ago.
In total, operating profit jumped 177.8% to $57.10 million.
Looking ahead, the company noted that second quarter results tend to show some seasonal weakness, but underlying market fundamentals are keeping the company optimistic about its prospects during the new calendar year.