Commercial Metals Company announced financial results for its second quarter ended February 29, 2016. Net earnings attributable to CMC for the three months ended February 29, 2016 were $10.5 million ($0.09 per diluted share) on net sales of $1.0 billion. This compares to net earnings attributable to CMC of $6.2 million ($0.05 per diluted share) on net sales of $1.4 billion for the second quarter ended February 28, 2015.
Joe Alvarado, Chairman of the Board, President, and CEO, commented, "Our second fiscal quarter has historically been our weakest quarter primarily due to seasonal slowdowns during the winter months. However, we are pleased with the results for our second quarter of fiscal 2016. The extinguishment of bond indebtedness helps to de-lever the balance sheet and the associated costs of extinguishment represent a less than one year pay back compared to the interest expense that we will avoid as a result. Additionally, during the second quarter of fiscal 2016, our Americas Fabrication segment benefited from reduced raw material input costs, resulting in expanded metal margins compared to the corresponding period of the prior fiscal year."
The Americas Recycling segment recorded adjusted operating loss of $7.6 million for the second quarter of fiscal 2016 compared to adjusted operating loss of $9.7 million for the second quarter of fiscal 2015. The Americas Mills segment recorded adjusted operating profit of $50.7 million for the second quarter of fiscal 2016 compared to adjusted operating profit of $59.5 million for the corresponding period in the prior fiscal year. The Americas Fabrication segment recorded adjusted operating profit of $14.8 million for the second quarter of fiscal 2016. This compares to adjusted operating loss of $5.8 million for the second quarter of fiscal 2015. The International Mill segment recorded adjusted operating profit of $2.0 million for the second quarter of fiscal 2016 compared to adjusted operating profit of $0.8 million for the corresponding period in fiscal 2015.
Alvarado concluded, "We expect demand for our finished steel products to improve heading into our fiscal third quarter, as the construction season ramps up. Non-residential construction spending, which is our primary end use market in the US, was up 11 percent year over year in February 2016. Furthermore, from a US perspective, we are encouraged by the strength of the Architecture Billings Index (ABI), posting above 50 for 21 of the 24 months ended February 2016, which has historically been a leading indicator of improved non-residential construction. Our order backlog remains strong. However, we expect to continue to be challenged globally by steel overcapacity in China, imports into the US and Poland, and a strong US dollar."