Commercial Metals Company

CMC reported third-quarter net earnings of $173 million, or $1.55 per diluted share. Adjusted earnings were $193 million, or $1.73 per diluted share, up 142.4% year over year. Consolidated core EBITDA was $354 million, up 78.6% year over year, and core EBITDA margin expanded to 14.2%, up 440 bps year over year. North American Steel Group adjusted EBITDA was $254 million, or $134 per ton of finished steel shipped, up 41% year over year. Construction Solutions Group net sales nearly doubled to $395 million, and adjusted EBITDA increased to $97.4 million. Europe Steel Group adjusted EBITDA was $34.7 million, including a $20.4 million CO2 credit. For fiscal 26, CMC continues to expect Precast adjusted EBITDA of $165 million to $175 million, fiscal 26 capex of about $550 million, and an effective tax rate of 7% to 9%. For Q4, management expects a meaningful sequential increase in core EBITDA, with overall company EBITDA up $40 million to $50 million sequentially, driven by the end of mill outages, higher volumes/margins, sequential mid-teens growth in Construction Solutions, and modestly higher Europe EBITDA excluding CO2 credits.

Peter Matt emphasized that CMC is continuing to execute its strategic plan and is moving toward structurally higher margins, reduced earnings volatility, and more sustainable growth. He highlighted TAG as a durable driver of margin expansion, saying the company is tracking well ahead of the $150 million fiscal 26 run-rate target and that the pipeline of new initiatives is replenishing. His tone was upbeat and confident, especially around Precast integration, organic growth projects, and the long-term demand backdrop in infrastructure, nonresidential, and Europe.

Paul Lawrence focused on the quarter’s financial bridge and on balance sheet progress. He said roughly $25.5 million of pretax items were excluded from adjusted earnings, including $19.8 million of non-cash amortization of acquired backlogs and $2.5 million for integration, and noted purchase accounting plus higher interest expense will widen the gap between core EBITDA and pre-tax earnings by about $60 million to $65 million per quarter for the next two quarters. He also said net leverage adjusted for acquisitions is now 2.1x, liquidity is nearly $1.8 billion, fiscal 26 capex is expected to be about $550 million, and the company does not anticipate significant U.S. federal cash taxes in fiscal 26 and likely not much in fiscal 27 either.

Analysts pressed management on the North American quarter, asking how much of the shortfall came from outages, weather, and scrap costs; management estimated about $20 million from mill outages and about $10 million from lower volume effects, and said the company is on track for about a $40 million quarter-over-quarter improvement in North America. Questions also focused on Precast guidance and the confidence behind maintaining $165 million to $175 million for fiscal 26; management pointed to normalized weather, record backlog, and better integration progress. A separate thread covered supply/demand in U.S. rebar and new domestic capacity, where Peter Matt said CMC will not disrupt market balance, imports should decline in the second half, and the company will pursue trade remedies against unfairly traded imports. Analysts also asked about capital allocation as leverage approaches 2x, and management said that level is a fulcrum point for both more growth capital and a more elevated pace of share repurchases.