Commercial Metals Co.'s (CMC) fiscal fourth-quarter profit fell
89% as the steelmaker and recycler saw revenue halved amid lower
demand and falling prices.
While demand and output were higher from the prior quarter,
President and Chief Executive Murray R. McClean said the jump "was
more due to restocking than any pickup in real demand."
Shares recently traded down 5.7% to $14.96 even as results
weren't as bad as analysts feared. The stock is still up 26% this
year.
McClean went on to say Commercial Metals remains concerned about
continued sustainability of demand, and it saw negligible benefit
from U.S. government stimulus. But those programs "are likely to be
effective" starting in January, "but at a slow pace." He added
private, nonresidential construction should remain weak, with
fiscal first-quarter prices trending "moderately lower" with
shipments at slightly lower levels than the fourth quarter.
For the period ended Aug. 31, Commercial Metals reported
earnings of $7.2 million, or 6 cents a share, down from $63.5
million, or 55 cents, a year earlier. Inventory accounting boosted
the latest quarter's bottom line by 21 cents, while it cut profit
by 78 cents last year.
Revenue fell 51% to $1.5 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of a penny a share on $1.46 billion in sales.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;