Commercial Metals Company (CMC) Q3 2026: Earnings Surge, Strong Outlook — Positive Momentum

In the third quarter of fiscal 2026, Commercial Metals Company (CMC) reported a significant increase in net earnings, achieving $173.0 million, or $1.55 per diluted share. This marks a remarkable increase of $89.9 million or +108.5% compared to the same quarter last year, where net earnings were $83.1 million, or $0.73 per diluted share. Adjusted earnings also saw a substantial rise, reaching $193.0 million, or $1.73 per diluted share, reflecting a 147.1% increase on a per-share basis year-over-year.

This quarter's performance is undoubtedly a positive outcome for shareholders, showcasing the company's ability to capitalize on favorable market conditions and strategic initiatives. The substantial growth in earnings is indicative of CMC's operational efficiency and effective management of costs, particularly in the North America Steel Group and Construction Solutions Group.

Key Financial Metrics:

• Net Earnings: $173.0 million, up from $83.1 million YoY (+108.5%)
• Earnings Per Share (EPS): $1.55, up from $0.73 YoY (+112.3%)
• Adjusted Earnings: $193.0 million, up from $78.1 million YoY (+147.1%)
• Consolidated Core EBITDA: $353.6 million, up 78.6% YoY
• Core EBITDA Margin: 14.2%, up 440 basis points YoY

The consolidated core EBITDA margin of 14.2% reflects a significant improvement, driven by metal margin expansion and contributions from recent acquisitions. The North America Steel Group reported adjusted EBITDA of $253.5 million, a 41% increase year-over-year, while the Construction Solutions Group saw net sales double to $394.6 million, with adjusted EBITDA up 138.1% year-over-year.

Shareholder Returns and Capital Allocation:

During the quarter, CMC repurchased 283,335 shares of common stock valued at $18.9 million. The board of directors declared a quarterly dividend of $0.20 per share, payable on July 15, 2026, marking the 247th consecutive quarterly payment. This commitment to returning capital to shareholders, alongside the strong earnings growth, underscores CMC's robust financial health.

Balance Sheet Strength:

As of May 31, 2026, CMC reported cash, cash equivalents, and restricted cash totaling $563.2 million, with available liquidity nearing $1.8 billion. The company has successfully reduced net leverage to 2.1x, demonstrating strong cash generation and balance sheet discipline.

Forward-Looking Catalysts:

Looking ahead to the fourth quarter, CMC is well-positioned to continue its positive momentum. The company anticipates sequential growth in core EBITDA, driven by healthy domestic demand, strong backlogs, and the absence of third-quarter headwinds from mill outages. The Construction Solutions Group is expected to see mid-teens adjusted EBITDA growth, supported by contributions from recent acquisitions and ongoing demand.

Investors should keep an eye on the upcoming Investor Day scheduled for August 5, 2026, where CMC will provide further insights into its long-term strategy and operational performance. This event will be crucial for understanding how CMC plans to leverage its current momentum and navigate future market conditions.

In conclusion, CMC's third-quarter results reflect a strong operational performance and a positive outlook for the remainder of fiscal 2026. The company's strategic initiatives and market positioning suggest that it is on track for continued growth, making it an attractive prospect for investors.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands)

Note: All amounts are in thousands.

	Three Months Ended	Three Months Ended	Nine Months Ended	Nine Months Ended
	May 31, 2026	May 31, 2025	May 31, 2026	May 31, 2025
Net sales	$2,483,784	$2,019,024	$6,735,664	$5,683,917
Cost of goods sold	2,028,849	1,720,477	5,485,677	4,856,665
Selling, general and administrative exp	222,314	175,769	651,104	521,187
Interest expense	40,205	10,864	105,981	33,353
Litigation expense	3,778	3,776	11,580	358,496
Net costs and operating exp	2,294,913	1,910,886	6,254,912	5,769,681
Earnings (loss) before income tax	188,839	109,512	481,514	-85,688
Income tax expense (benefit)	15,824	26,386	38,185	-18,569
Net earnings (loss)	$173,015	$83,126	$443,329	$-67,119
Earnings (loss) per share: Basic	$1.56	$0.74	$4.00	$-0.59
Earnings (loss) per share: Diluted	$1.55	$0.73	$3.96	$-0.59
Cash dividends per share	$0.20	$0.18	$0.56	$0.54
Average shares outstanding: Basic	110,845,399	112,701,197	110,950,161	113,437,160
Average shares outstanding: Diluted	111,713,144	113,551,021	111,974,069	113,437,160

CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

Note: All amounts are in thousands.

Assets	May 31, 2026	August 31, 2025
Current assets: Cash and cash equivalents	$559,759	$1,043,252
Restricted cash	3,458	2,652
Accounts receivable (less allowance for doubtful accounts of $4,422 and $3,186)	1,391,195	1,201,680
Inventories, net	1,172,564	934,310
Prepaid and other current assets	334,739	312,924
Total current assets	3,461,715	3,494,818
Property, plant and equipment, net	3,330,149	2,742,773
Intangible assets, net	463,872	210,815
Goodwill	2,136,509	386,846
Other noncurrent assets	404,110	336,582
Total assets	$9,796,355	$7,171,834
Liabilities and stockholders' equity: Accounts payable	$458,482	$358,373
Accrued contingent litigation-related loss	373,476	362,272
Other accrued expenses and payables	567,654	493,879
Current maturities of long-term debt	88,792	44,289
Total current liabilities	1,488,404	1,258,813
Deferred income taxes	190,672	184,645
Other noncurrent liabilities	273,445	225,044
Long-term debt	3,311,693	1,310,006
Total liabilities	5,264,214	2,978,508
Stockholders' equity: Common stock, par value $0.01 per share; authorized 200,000,000 shares; issued 129,060,664 shares; outstanding 110,695,456 and 111,189,136 shares	1,290	1,290
Additional paid-in capital	415,814	406,916
Accumulated other comprehensive loss	-23,164	-25,251
Retained earnings	4,888,315	4,507,114
Less treasury stock, 18,365,208 and 17,871,528 shares at cost	-750,388	-697,003
Total stockholders' equity	4,531,867	4,193,066
Stockholders' equity attributable to non-controlling interests	274	260
Total stockholders' equity	4,532,141	4,193,326
Total liabilities and stockholders' equity	$9,796,355	$7,171,834

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