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Company Profile

Commercial Metals Company engages in recycling, manufacturing, fabricating, and distributing steel and metal products, and related materials and services in the United States and internationally.

Commercial Metals Company (CMC) is scheduled to report its third quarter earnings results on June 27, 2012, before market open.

Technical Overview

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Commercial has a market cap of $1.42 billion and it is currently trading around $12.21 with a 52 week range of $8.64 to $16.48. The stock has fallen 12.87% year to date. The following table provides the key financial ratios for Commercial:

Key RatioValue
Current Ratio2.23
PEG3.28
P/E20.78
Forward P/E6.85
Profit Margin0.84%
Return On Assets (ROA)1.94%
Return On Equity (ROE)5.53%

Recent News

  • On June 13, 2012, Commercial Metals Company announced the completion of the sale to an undisclosed and unaffiliated third-party of the assets related to the welded pipe mill and seamless pipe mill of CMC's former Croatian Pipe Mill and wholly-owned subsidiary, CMC Sisak d.o.o., for a total consideration of U.S. $6,650,000. These assets were part of the assets excluded from the sale on June 1, 2012, of all of the outstanding shares of CMC Sisak to Industrielle Beteiligung SA (a member of the Steel Making Division of the Danieli Group).
  • On June 4, 2012, Commercial Metals Company announced the completion of the sale of its Croatian Pipe Mill and wholly-owned subsidiary, CMC Sisak, d.o.o. (CMC Sisak), pursuant to a definitive purchase agreement whereby CMC sold all of the outstanding shares of CMC Sisak to the Danieli Group - Steel Making Division by the Danieli holding company, Industrielle Beteiligung SA (Danieli). Total consideration for the sale is approximately U.S. $30.4 million.
  • On March 28, 2012, Commercial Metals Company declared a quarterly dividend of $0.12 per share, or $0.48 annualized.

Here's a list of recent changes to analyst ratings:

  • On June 11, 2012, Goldman Sachs upgraded Commercial Metals Company from SELL to NEUTRAL and raised the price target from $12.50 to $14.00.
  • On May 8, 2012, Thomas White/Global Capital upgraded Commercial Metals Company from UNFAVORABLE to NEUTRAL.
  • On April 27, 2012, Ford Equity Research upgraded Commercial Metals Company from FAVORABLE to BUY.
  • On April 23, 2012, Ned Davis Research upgraded Commercial Metals Company from SELL to NEUTRAL.
  • On April 13, 2012, EVA Dimensions, LLC upgraded Commercial Metals Company from SELL to UNDERWEIGHT.
  • On April 9, 2012, Ned Davis Research downgraded Commercial Metals Company from NEUTRAL to SELL.
  • On April 6, 2012, Ativo Research upgraded Commercial Metals Company from UNFAVORABLE to NEUTRAL.
  • On March 30, 2012, Ford Equity Research upgraded Commercial Metals Company from NEUTRAL to FAVORABLE.
  • On March 29, 2012, Jefferies raised estimates and its price target on Commercial Metals Company from $14 to $16 but kept its HOLD rating.

Analyst Guidance and Earnings History

The third quarter revenues are expected to be $2.14 billion when compared to $2.08 billion for the same quarter last year. Earnings per share for the third quarter are expected to be 38 cents a share, up from a 32 cents a share in the year-ago period.

The average price target from analyst for Commercial is $15.63 with average rating is OVERWEIGHT

Out of the last 4 quarters, Commercial has met or exceeded the EPS estimates all the 4 times. The following chart shows the analyst estimates history and the actual EPS results:

The following chart shows the annual summary of sales and net income for Commercial:

Competition

Nucor Corp (NUE), United States Steel Corp (X), Ak Steel Holding Corp (AKS) and Steel Dynamics Inc (STLD) are considered as major competitors for Commercial Metals and the table below provides the key metrics for these companies:

SymbolCMCNUEXAKSSTLD
Price$12.25$38.36$20.63$5.47$12.07
52 Week Price-12.60%-3.78%-51.53%-61.50%-21.11%
Market Capitalization$1.4B$11.9B$2.7B$571.6M$2.4B
Earnings per Share0.582.4-1.51-1.60.96
Total Revenue$8.3B$20.3B$20.2B$6.4B$8.0B
Employees (Full-Time)11422208004300066006530

Sources: Some of the data is taken from Google Finance,Nasdaq, Yahoo Finance, Finviz and investor sites.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Source: Earnings Preview: Commercial Metals Company