Commercial Metals (CMC) Q3 FY26 earnings call: guidance and Q&A

Quantify the moving pieces beyond maintenance in Q3 NA and confirm the implied ~$40M sequential increase into Q4.

Paul broke it out: ~$20M direct outage cost; weather + low inventory + commercial discipline cost ~50,000 tons / ~$10M of volume; NA on track for ~$40M QoQ improvement. He added ~$5M weather impact in CSG and flagged the $20M Europe CO2 credit will not recur in Q4, leaving overall CMC EBITDA up $40-50M QoQ.

“So all in cost of around $10 million associated with the volume. All of those items very temporary as we mentioned in the script and expect those to reverse in the fourth quarter.”

asked by Nick Cash (attributed by operator to Goldman Sachs) · answered by Paul Lawrence

What gives confidence in the 165-175M precast EBITDA target given the implied heavy Q4 lift?

Peter said Q3 volumes were light due to ~2-week project-release delays and wet weather in Georgia, both normalizing into Q4; combined with a record backlog and strong integration, he is very confident of hitting the original guidance and 'feels stronger' about the acquisition than at deal close.

“our backlog is at a record level, give us confidence that we can hit the guidance that we have originally given.”

asked by Samuel McKinney (KeyBank) · answered by Peter Matt

Any demand slowdown from Fed rate outlook, and how to view supply with imports up 20% YTD from South Korea?

Peter gave an extended answer: US apparent consumption +3.2%; CMC will run its flexible network to keep supply-demand balanced (value over volume). New domestic capacity is 'manageable' (prices still rising). Imports should fall in H2 as Korean economics are uncompetitive; CMC has opened government discussions and secured a final 200% duty on Algeria plus preliminary duties on three others covering ~500,000 tons for a minimum of 5 years.

“CMC will not disrupt the supply demand balance... we are going to work to keep supply-demand in balance and maximize the profitability of our network.”

asked by Satish Kassinathan (BofA) · answered by Peter Matt

Is there enough demand to absorb CMC's and competitors' new supply, and how are the two micro mills progressing?

Peter argued demand is growing (+3.2%) and CMC will flex its network rationally on a value-over-volume basis, using its import strategy to make room for new domestic entrants. Arizona 2 reached >75% utilization producing merchant products (not just rebar); West Virginia is on budget, hot-commissioning late summer (slipped from June on ~100 weather days), a standard rebar mill with a ~12-month ramp. Paul noted WV carrying costs of $4-5M/quarter doubling in Q4.

“we've been hearing about HIBAR for years now. And here we are. They're in the market. They've ramped up, and we're raising prices.”

asked by Timna Tanner (Wells Fargo) · answered by Peter Matt

With leverage target approaching, how do you weigh growth M&A vs shareholder returns and organic growth?

Peter framed 2.0x as a 'fulcrum': the green light turns on for both growth opportunities and elevated share repurchases. Sizable M&A waits until precast integration is comfortable (small tuck-ins continue); ambition is a #1 precast position over time. Organic growth will be capital-light roundouts, no further mill investments. Paul highlighted a cash-flow inflection with FY27 capex ~$200M lower.

“at two times... The green light goes on for the ability to consider new growth opportunities. And at the same time, it also turns the green light back on for shareholder distribution.”

asked by Albert Rilini (Jefferies) · answered by Peter Matt

Where has TAG succeeded and where is the biggest future opportunity; how to rank Europe tailwinds and status of the prior $10-15/ton energy cost?

Peter said TAG benefits to date are mostly operational (yields, logistics), but commercial excellence — leakage reduction, decision tools, lead-sharing/value-engineering on megaprojects, and AI — is the larger future opportunity. On Europe, CBAM (~€50/ton), 50%-cut safeguard quotas, and infrastructure demand are all positive; Paul noted ~$75/ton realized price Dec-May vs ~$25/ton scrap, and that the feared $10-15/ton energy cost did not materialize (no Q3 energy cost increase; Poland ~50% hedged).

“the opportunity for commercial excellence in our business and in our industry more broadly is outstanding and will outweigh the operational benefits that we're getting.”

asked by Bill Peterson (J.P. Morgan) · answered by Peter Matt

How to think about scrap and metal margins into Q4 given the $28/ton scrap rise, and is competitor pricing pushback a one-off?

Paul sees scrap stable for the balance of the fiscal year (Q3 rise was flow-through of winter costs plus diesel correlation); maintenance costs won't recur in Q4. Peter acknowledged some discounting in the market but, given demand, sees no need to follow — Q4 prices and metal margins will be higher, supported by megaproject demand favoring CMC.

“you will see in our fourth quarter that our prices are higher and our metal margins are higher.”

asked by Richard (Barclays) · answered by Peter Matt

West Virginia FY27 volume/utilization, whether Europe's strong volume is sustainable, and CSG forward run-rate and FY27 synergies.

Peter guided WV to ~250,000-300,000 tons in FY27, fully ramped over the year. Europe's volume strength is not a one-off — Poland demand was always strong; curtailed supply lets CMC sell more tons at higher price (three increases YTD). On CSG, base business ~$250M EBITDA with mid-single-digit growth and $35-40M combined synergies over three years (year 1 dis-synergy, ramping to full by year 3).

“we talked about between the two businesses, a number that's, I think, $35 to $40 million combined. And we expected to earn that over kind of a three-year period.”

asked by Tristan Gresser (BNP Paribas) · answered by Peter Matt