Commercial Metals Company earnings recap
Q4 FY2026, reported October 15, 2026 · Beat 4 of last 7 quarters
Commercial Metals Company reported Q4 FY2026 revenue of $2.66B, a beat of 3.7% against consensus, and EPS of $2.09, a beat of 7.2%.
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CMC flagged data centers, power generation, utility infrastructure, semiconductor manufacturing and institutional markets as solid demand drivers, with the Dodge Momentum Index near record levels and larger, more complex projects increasingly favoring its vertically integrated network and downstream capabilities. Downstream backlog rose 15.5% year over year and Precast bookings rose 12.6% sequentially, which could serve as an early read on early-stage construction activity tied to the buildout. The Steel West Virginia ramp and the targeted 150,000-200,000 tons of incremental merchant bar shipments may add finished-steel and downstream capacity into these same construction channels.
| Estimate | Actual | vs est | ||
|---|---|---|---|---|
| Revenue | $2.56B | $2.66B | +3.7% | beat |
| EPS | $1.95 | $2.09 | +7.2% | beat |
CMC reported fiscal Q4 net earnings of approximately $213 million, or $1.91 per diluted share, with roughly $26.8 million of pretax expenses excluded from adjusted earnings, including $19.8 million of noncash amortization related to acquired backlog. Fourth-quarter core EBITDA increased 35.1% year over year to approximately $394 million at a 14.8% margin, capping a full year in which core EBITDA reached roughly $1.4 billion, up from $837 million, and core EBITDA margin expanded 380 basis points to 14.5%. North American Steel Group adjusted EBITDA rose 25.2% sequentially to $317 million on TAG benefits, metal margin expansion and merchant bar shipment growth; metal margin increased $42 per ton sequentially to $652 on a $32 per ton higher average selling price and $10 per ton lower scrap costs, while finished steel shipments rose 7.1% sequentially and downstream volumes grew 8.5% year over year. Construction Solutions Group net sales rose 94.5% year over year and adjusted EBITDA more than doubled, though Precast results came in below expectations on residential softness in certain Southeastern markets, and Tensar capped a year in which profitability increased approximately 50%. Europe comparisons were affected by the absence of CO2 credits received in prior periods, though underlying Poland fundamentals improved with metal margin up $32 per ton year over year, and net leverage adjusted for acquisitions fell to 1.9x, below the 2x target.
Management guided to sequentially flat North American Steel Group adjusted EBITDA in fiscal Q1 2027, with improved pricing largely offsetting higher scrap costs, $3M-$5M of incremental West Virginia startup expense (after roughly $9M in Q4) and a slight seasonal shipment decline. Construction Solutions Group adjusted EBITDA is expected to be down sequentially on typical seasonal trends, while Europe is expected to increase meaningfully, including $10M-$15M of CO2 credits partly offset by $10M-$15M per ton higher energy costs. The company reiterated a $240M-$250M annual run-rate EBITDA target for Precast, though Q1 is expected down mid- to high-single digits sequentially. Fiscal 2027 capital expenditures are expected to decline by nearly $200M to roughly $400M, about a quarter of which is growth spend, with free cash flow and free cash flow conversion improving in FY27 and again in FY28. Management said it intends to accelerate the pace of share repurchases under the roughly $700M remaining authorization, and cited more than $250M of TAG gross run-rate benefits already achieved with a line of sight to an additional $100M by the end of fiscal 2027. Steel West Virginia is expected to start up over roughly a 12-month period with breakeven about six months after startup, and management reiterated confidence in the fiscal 2029 core EBITDA target range, saying the company could far exceed the low end in today's environment.
“We exited fiscal 26 with more than $250 million of gross run rate benefits achieved and a clear line of sight on an additional $100 million of run rate benefits by the end of fiscal 2027.”
on TAG run-rate benefits
“With our strong cash generating capabilities and the opportunity we see in the current share price, we intend to accelerate our pace of activity under the program.”
on Share repurchase acceleration
“But as a starting objective, we can get up to a million tons of merchant shipments And that would imply about 150 thousand to 200 thousand tons of incremental merchant shipments.”
on Merchant bar mix opportunity
After a soft third quarter and a Q4 precast EBITDA number about $20 million short of what was intimated last call, is an annual run-rate EBITDA of around $240 million to $250 million still the right way to think about the business before any more acquisitions?
Management said it is still a good target for the year, citing backlog, integration progress and momentum, with Q1 expected down mid- to high-single digits sequentially on seasonal weakness. Peter Matt noted residential declines have been filled in by a strong slug of nonresidential and infrastructure work, pricing continues to rise across the portfolio, and the company remains confident Precast is a continuing strong contributor.
Annualizing the quarterly numbers puts precast sales ahead of what was discussed at acquisition but EBITDA behind. What is going on relative to the markets you operate in - is it residential, cost pressures or mix?
Peter Matt attributed it to residential volume weakness in the Southeast. CP&P portfolio volumes are up and almost offsetting the Southeast decline, but the margin gap between the Foley and CP&P portfolios has not yet been closed through integration, magnifying the lost-volume EBITDA impact. Pricing is rising quarter over quarter and year over year, margins held at 30%, and the residential portion of the portfolio is running at about 50% to 60% of a normal environment; bookings rose 12.5% in Q4 and continued rising in September.
CapEx is guided to $400 million in fiscal 27 with 25% growth CapEx - what are the key growth projects, and how should we think about capital allocation between buybacks and M&A dry powder?
Paul Lawrence said the vast majority of the roughly $100 million growth spend is West Virginia plus performance-target payments, with the GeoGrid and GalvaBar lines in startup mode in 2027 and limited EBITDA contribution. Peter Matt said CMC will keep dry powder for M&A, has an active but nothing-significant dialogue, and will pull forward the roughly $700 million repurchase authorization, with a meaningful increase in shares bought expected.