In its recently released financial report, Commercial Metals Company, based in Irving, Texas, highlighted a robust fiscal fourth quarter and a commendable full year for 2024. The company recorded net earnings of $103.9 million, equating to $0.90 per diluted share, on net sales of $2 billion. This reflects a decrease from the previous year's fourth quarter, which saw net earnings of $184.2 million on net sales of $2.2 billion. Despite the decline, CMC maintained solid performance amid challenging market conditions characterized by lower steel pricing and heightened economic uncertainty.
For the full year 2024, CMC reported net earnings of $485.5 million, or $4.14 per diluted share, from net sales of $7.9 billion. This represented a drop from the previous year's earnings of $859.8 million on sales of $8.8 billion. Peter Matt, CMC's President and Chief Executive Officer, emphasized that the company experienced a significant year, noting record safety performance and advancements in strategic projects despite the impact of macroeconomic factors on steel pricing.
One of the standout performers during this quarter was the Tensar division, which achieved its most profitable results to date. This success contributed to the Emerging Businesses Group's adjusted EBITDA margin of 21.7% for the fourth quarter. The firm’s focus on cost management proved effective, particularly within its Europe Steel Group, where adjusted EBITDA improved by $26.5 million year-over-year, even with lower shipment volumes. This showcases CMC’s ability to adapt and manage costs in a challenging environment.
As CMC navigates the complexities of the steel market, construction activity in North America provided stability for shipment volumes. The company reported that average daily shipments of finished steel products remained steady compared to prior periods. However, margins were pressured by declining average steel prices. With a healthy construction pipeline, CMC is optimistic about future growth, although there are concerns regarding ongoing macroeconomic uncertainty and its potential impact on construction project timelines.
Cash flow from operations remained strong, with CMC generating $351.8 million in the fourth quarter and $899.7 million for the entire fiscal year. The company has been proactive in returning value to shareholders, with cash distributions amounting to $261.8 million in fiscal 2024, marking a 48% increase from the previous year. This commitment to shareholder returns was underscored by the board's recent decision to declare a quarterly dividend of $0.18 per share, reflecting a year-over-year increase of approximately 13%.
Business segments within CMC also revealed interesting dynamics. The North America Steel Group saw adjusted EBITDA decrease to $210.9 million from $336.8 million in the prior year, primarily due to lower margins. In contrast, the Emerging Businesses Group saw stable performance with an adjusted EBITDA margin of 21.7%, driven by a favorable sales mix and resilient demand conditions in North America.
Looking ahead, CMC's management expects some decline in financial results for the first quarter of fiscal 2025, influenced by ongoing economic uncertainties. The company anticipates normal seasonal trends in finished steel shipments but expects adjusted EBITDA margins to face pressures from lower steel product margins. Nevertheless, there is optimism regarding the underlying demand fundamentals, particularly in infrastructure investment and manufacturing re-shoring, which could support a resurgence in financial performance as market conditions stabilize.
