Strong GAAP and Adjusted Earnings
Reported net earnings of $93.0 million ($0.83 per diluted share) and adjusted earnings of $130.1 million ($1.16 per diluted share) after excluding certain acquisition and other items.
Commercial Metals Company
· CMC
March 26th, 2026
Summary
- Earnings Call Date:
- 2026-03-26
- Change Since:
- +20.22%
- Next Earnings Date:
- 2026-06-25
Earnings Call Sentiment
PositiveThe earnings call conveyed a predominantly positive message: materially higher consolidated core EBITDA (up 114% YoY), strong contributions and promising outlook from the newly acquired precast platform, solid North America margins and meaningful TAG-driven improvements. The company also demonstrated healthy liquidity and progress toward deleveraging while increasing the dividend. Short-term headwinds include weather-related production disruption, acquisition-related purchase accounting amortization that will compress GAAP income versus core EBITDA for several quarters, European import-related disruption and some maintenance/energy cost pressures. On balance, the positive operational momentum, acquisition upside and financial strength outweigh the near-term challenges.
Company Guidance
Guidance highlights: Management expects consolidated core EBITDA to increase meaningfully in Q3 from Q2’s $297.5M (14% margin), with North America Steel Group adjusted EBITDA rising modestly sequentially but facing ~$15–$20M of outage-related costs; Construction Solutions Group EBITDA is expected to nearly double sequentially, and Europe Steel Group EBITDA to substantially improve including an anticipated ~ $20M CO2 credit. For fiscal 2026 the newly acquired precast platform is still guided to deliver $165–$175M of EBITDA, capex is expected to be about $600M (≈$300M to complete the West Virginia micromill and ~$25M for precast), and the company targets returning adjusted net leverage from ~2.3x back to ≤2.0x (aided by precast free cash flow and tax benefits). Other forward-looking metrics: TAG is on track to reach or exceed a $150M annualized EBITDA run rate by year-end, full-year effective tax rate is expected at 7–9%, quarterly dividend was raised $0.02 to $0.20 (11% increase), total liquidity is just over $1.7B (cash $504M + ~$1.2B facilities), and purchase-accounting/amortization and higher interest will widen the gap between core EBITDA and pre-tax income by roughly $60–$65M per quarter for the next three quarters.
Large YoY EBITDA Improvement
Consolidated core EBITDA of $297.5 million, an increase of 114% year-over-year, with core EBITDA margin of 14% (up 610 basis points versus prior year).
North America Steel Segment Profitability
North America Steel Group adjusted EBITDA of $269.7 million (approximately $257 per ton shipped) with a segment EBITDA margin of 16.8%, supported by TAG initiatives and higher margin over scrap.
Precast Platform Acquisition and Strong Early Performance
Entry into precast via CP&P and Foley; Construction Solutions Group net sales of $314.4 million (up 98% YoY) and adjusted EBITDA of $53.4 million (up 127% YoY). Precast contributed $33.6 million to segment adjusted EBITDA; excluding inventory purchase accounting, precast EBITDA was $40.3 million on revenue of $145 million.
Precast Full-Year Expectation
Company expects the precast business to generate $165 million–$175 million in EBITDA for the full fiscal year, providing a sizable growth platform and free cash flow contributor.
TAG Program Momentum
Enterprise-wide TAG operational/commercial excellence program driving bottom-line benefits; company is confident it will reach or exceed an annualized run-rate EBITDA benefit of $150 million by fiscal year-end.
Backlog, Bookings and Market Signals
Second-quarter bookings were the highest since late fiscal 2022; backlog value at quarter end was up by a high single-digit percentage versus Feb 2025, with strong activity in data centers, public works, institutional, energy projects and reshoring-related opportunities.
Healthy Liquidity and Deleveraging Progress
Cash and cash equivalents of $504 million plus ~$1.2 billion of availability (total liquidity just over $1.7 billion). Adjusted net leverage approximately 2.3x (improved from the illustrative 2.7x at acquisition) with stated goal to return to ≤2x.
Shareholder Returns and Tax Outlook
Quarterly dividend increased by $0.02 to $0.20 per share (an 11% increase). Full-year effective tax rate guidance reiterated at 7%–9% and company expects little to no significant U.S. federal cash taxes in fiscal 2026 and much of 2027.
Capital Expenditure Guidance
Fiscal 2026 capital spending guide of approximately $600 million (slightly lower than January guide), with about $300 million for completing West Virginia micromill and ~$25 million for precast capital needs.
Operator
Hello, and welcome everyone to the fiscal 2026 second quarter earnings call for Commercial Metals Company. Joining me on today's call are Peter Matt, Commercial Metals Company's President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press release and supplemental slides that accompany this call can be found on Commercial Metals Company's investor relations website. Today's call is being recorded. After the company's remarks, we will have a question-and-answer session, and I will have a few instructions at that time. I would like to remind all participants that today's discussion contains forward-looking statements, including with respect to economic conditions, effects of legislation and trade actions, U.S. steel import levels, construction activity, demand for finished steel products and precast concrete products, the expected capabilities, benefits, costs, and timeline for construction of new facilities, the expected performance of our recently acquired precast platform, the company's operations, the company's strategic growth plan and its anticipated benefits, legal proceedings, the company's future results of operations, financial measures, and capital spending. These statements reflect the company's beliefs based on current conditions, but are subject to risks and uncertainties.
The company's earnings release, most recent annual report on Form 10-K, and other filings with the U.S. Securities and Exchange Commission contains additional information concerning factors that could cause ...
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