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Commercial Metals (CMC) 1Q Earnings Drop 53.9 Pct On Lower Volumes

 January 07, 2013 08:15 AM

(By Balaseshan) Commercial Metals Co. (NYSE: CMC) reported a 53.9% drop in quarterly earnings, spurred by lower demand, higher conversion costs, and declining volumes.

Earnings were $49.72 million or $0.42 per share for the first quarter, down from $107.73 million or $0.93 per share last year.

The latest quarter results included an after-tax gain of $17.0 million ($0.14 per share) associated with the sale of the company's 11% ownership interest in Trinecke Zelezarny, a.s., a Czech Republic joint-stock company.

Sales decreased to $1.79 billion from $1.99 billion.

Analysts, on average, polled by Thomson Reuters had expected profit of $0.17 per share on sales of $1.89 billion for the first quarter.

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Total Americas Steel Mills tons shipped rose to 666,000 tons from 641,000 tons, while International Mill shipments declined to 345,000 tons from 378,000 tons. Total Americas Fabrication tons shipped increased to 260,000 from 245,000.

The company recorded after-tax LIFO income of $15.2 million or $0.13 per share for the first quarter, compared to $15.5 million or $0.13 per share in the previous year quarter.

Adjusted operating income grew to $90.60 million from $21.12 million.

On January 4, the board of CMC declared a quarterly dividend of $0.12 for shareholders of record on January 18. The dividend will be paid on February 1.

"Our second fiscal quarter is normally our weakest period of the year due to holiday slowdowns and winter weather conditions curtailing construction activity. However, there is growing evidence of an emerging recovery in domestic construction end markets, which is encouraging for future quarters. Our customers remain cautious, and stocking levels are low," said Joe Alvarado, Chairman, President and CEO.

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The stock, which has been trading between $11.30 and $16.48 over the past year, closed Friday's regular session up 1.70% at $15.54.

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