Commercial Metals Company (NYSE:CMC) reported first-quarter net sales of $1.91 billion, beating the consensus of $1.873 billion.

Core EBITDA decreased to $210.7 million from $313.7 million in the prior year quarter, with a core EBITDA margin of 11.0%, down from 15.7%. Adjusted EPS was $0.78, missing the consensus of $0.81.

The company reported strong North American demand, fueled by late-season construction as projects recovered from earlier weather delays.

Finished steel shipments rose 4.4% year-over-year, with a healthy project pipeline indicated by steady downstream backlog and bidding activity.

Merchant product shipments also grew, supported by enhanced service to West Coast customers from the Arizona 2 micro mill.

Adjusted EBITDA for CMC's North America Steel Group fell to $188.2 million in the first quarter of FY25 from $266.8 million a year earlier, due to lower margins on steel and downstream products.

The adjusted EBITDA margin for the North America Steel Group dropped to 12.4%, compared to 16.8% in the prior year period.

The company stated that European market conditions in the quarter were similar to recent periods, with long-steel consumption significantly below historical levels.

The Europe Steel Group reported adjusted EBITDA of $25.8 million, including a $44.1 million annual CO2 credit from a government program through 2030.

As of November-end, cash and cash equivalents totaled $856.1 million, with available liquidity of nearly $1.7 billion. Net cash flows from operating activities totaled $213.0 million, compared to $261.06 million a year ago.

During the quarter, CMC repurchased 919,481 shares of common stock valued at $50.4 million; $353.4 million remained available under the current share repurchase authorization.

On January 2, 2025, the board declared a quarterly dividend of $0.18 per share, payable on January 30, to stockholders of record on January 16, 2025.

Peter Matt, President and Chief Executive Officer, said, "Financial results continued to be hindered by economic uncertainty that has weighed on new construction activity, pressuring steel pricing and margins. We remain confident that this weaker demand environment will be temporary as we expect the underlying drivers across infrastructure, non-residential and residential end markets will provide multiyear support for our business."

"Our downstream bid levels and several key external indicators continue to evidence a robust pipeline of potential future projects that should translate into construction activity in the coming quarters."

Outlook: The company expects consolidated financial results for the second quarter of FY25 to decline sequentially.

Finished steel shipments in the North America Steel Group are projected to follow typical seasonal patterns, while adjusted EBITDA margin is expected to decline sequentially on lower margins over scrap cost on steel and downstream products.

The Europe Steel Group's adjusted EBITDA is expected to remain consistent with the prior-year quarter as strict cost controls help offset weak market conditions.

Investors can gain exposure to the stock via SEI Select Small Cap ETF (NASDAQ:SEIS) and Vanguard Russell 2000 Value ETF (NASDAQ:VTWV).

Price Action: CMC shares are trading higher by 3.09% at $50.40 premarket at the last check Monday.

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