South Korean long product imports declined significantly in September. What is the sustainability of this trend, and does CMC expect further government action?

Paul Lawrence stated that the economics of importing rebar from South Korea are no longer competitive with CMC's pricing, effectively resolving the issue for the short term. He emphasized that past trade cases have proven durable and effective in removing material from the market, and CMC will monitor the situation. “I think the reality is, is that when you kind of stack up the costs in the current environment of getting rebar to the U.S. from South Korea, it's not competitive with where our pricing is even with the current price increases that we've just recently put in place.”

Can you provide more detail on the expected CO2 credits in Europe and the magnitude of start-up costs for the West Virginia mill in Q1 FY27?

Paul Lawrence specified that Europe expects $10 million to $15 million in CO2 credits for Q1 FY27, partially offset by higher energy costs. For the West Virginia mill, incremental start-up costs are projected to be $3 million to $5 million in Q1 FY27, a slight uptick from Q4 FY26's $9 million to $10 million. “We are expecting at this stage somewhere between $10 million and $15 million of CO2 credits. Offsetting that in Europe will be the higher energy costs that I cited. We've seen those so far throughout the quarter around $10 to $15 a ton.”

What is the expected cadence for the West Virginia mill ramp-up, including first commercial shipments and the previously guided volume targets?

Peter Matt stated that the start-up is expected to occur over a 12-month period, with the mill reaching breakeven after about 6 months. Paul Lawrence added that FY27 production volume would likely be under 200,000 tons, less than previously indicated, due to ongoing commissioning and start-up activities beginning near the end of Q1 FY27. “I think it's fair to say that we expect the startup to occur over kind of a 12-month period. and we should be breakeven after about 6 months.”

CMC

Commercial Metals Company (CMC) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Aug 2026 (Q4 FY26)· Materials· Oct 15, 2026

Source: earnings call transcript

Executive summary

Commercial Metals Company Q4 FY26 — Strong Performance Driven by Strategic Initiatives and Growth Investments

Commercial Metals Company concluded a strong fiscal year, with Q4 FY26 core EBITDA expanding significantly, driven by strategic initiatives and growth investments. The company successfully reduced leverage below its target, enhancing financial flexibility for future growth and shareholder returns. While residential market softness impacted precast results, robust nonresidential and infrastructure demand, coupled with effective trade policies, supports a positive outlook for early-stage construction products.

Highlights

Core EBITDA increased 35.1% year-over-year to $394 million in Q4 FY26.
Core EBITDA margin expanded 100 basis points year-over-year and 60 basis points sequentially to 14.8% in Q4 FY26.
Net leverage adjusted for acquisitions reduced to 1.9x, below the target of 2x.
Downstream product volumes grew 8.5% year-on-year in Q4 FY26.
TAG program achieved over $250 million in gross run rate benefits, with clear line of sight to an additional $100 million by end of FY27.

Concerns

Construction Solutions Group (Precast) results were below expectations due to residential softness in certain Southeastern markets, impacting adjusted EBITDA.
Unplanned outage at Galvabar facility affected shipments during Q4 FY26.
European energy costs are anticipated to increase by a further $10 to $15 per ton in Q1 FY27.

Guidance & targets

Category	Target	Timeline	Confidence
North American Steel Group Adjusted EBITDA	nearly flat medium materiality	Q1 · FY27	Medium
Construction Solutions Group Adjusted EBITDA	down sequentially medium materiality	Q1 · FY27	Medium
Europe Adjusted EBITDA	meaningfully increase sequentially medium materiality	Q1 · FY27	Medium
Total Capital Expenditures	roughly $400 million high materiality	FY27	High
Growth Capital Expenditures	roughly 1/4 of anticipated 2027 spend medium materiality	FY27	High
Effective Tax Rate	approximately 24% medium materiality	FY27	High
U.S. Federal Cash Taxes	not anticipate paying significant medium materiality	much of FY27	High
Acquired Backlog Amortization	approximately $20 million low materiality	Q1 · FY27	High
Acquired Backlog Amortization	roughly $2 million low materiality	Q2 · FY27	High
TAG Run Rate Benefits	additional $100 million high materiality	by end of FY27	High
Core EBITDA	$1.65 billion to $1.8 billion high materiality	FY29	High
West Virginia Micromill Production Volume	a little under 200,000 tons medium materiality	current year (FY27)	Medium
West Virginia Micromill Breakeven	after about 6 months medium materiality	post start-up	High
Share Repurchase Authorization	accelerate our pace of activity high materiality	ongoing	High
Merchant Shipments	up to 1 million tons medium materiality	long-term objective	Medium
European Business Profitability	back to $100 million medium materiality	over time	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
North American Steel Group Strong performance driven by TAG benefits, metal margin expansion, and growth in merchant bar shipments. Segment margins increased significantly, reflecting strategic execution and differentiated capabilities for large, complex projects. Adjusted EBITDA sequential growth: 25.2%Adjusted EBITDA margin: 16.4%Adjusted EBITDA margin sequential expansion: 220 bpsAdjusted EBITDA margin YoY expansion: 160 bpsMetal margin: $652/tonMetal margin sequential increase: $42/tonAverage selling price sequential increase: $32/tonScrap costs sequential decline: $10/tonFinished steel shipments sequential increase: 7.1%Downstream backlog YoY increase: 15.5%Downstream backlog sequential increase: 5%Merchant bar shipments YoY increase: 27.5%	—	—	—	$317 million Adjusted EBITDA
Construction Solutions Group Net sales and adjusted EBITDA more than doubled year-over-year, with margin expansion. Performance reinforcing steel results were lower due to an unplanned outage at the Galvabar facility. Excluding precast, the segment delivered strong year-on-year revenue and EBITDA growth. Adjusted EBITDA margin expansion: 80 bps	increased 94.5%	94.5%	—	Adjusted EBITDA more than doubled
Precast Business (within Construction Solutions Group) Results were below expectations primarily due to residential softness in certain Southeastern markets, leading to lower volumes and regional margin mix headwinds. However, leading indicators like bookings and backlog remain positive, supported by nonresidential and infrastructure demand. Integration activities are on track, meeting or exceeding synergy expectations. Adjusted EBITDA since acquisition (excluding purchase accounting): ~$150 millionBookings sequential increase: 12.6%Bookings YoY increase: upBacklog YoY increase: ~3%Backlog sequential increase: ~4%Average backlog pricing: trended higher	—	—	—	$57.1 million Adjusted EBITDA
Europe Adjusted EBITDA comparisons were affected by the absence of CO2 credits received in prior periods. Underlying business fundamentals in Poland are improving, with strengthening steel prices and metal margin expansion. Market conditions are becoming more constructive due to CBAM and tariff rate quota framework, despite increasing energy costs. Adjusted EBITDA affected by CO2 credits in prior periods ($30.7M in Q4 FY25, $20.4M in Q3 FY26; none in Q4 FY26)Metal margin YoY expansion: $32/tonAverage selling prices YoY increase: $44/tonAverage selling prices sequential increase: $15/tonEnergy costs sequential increase: ~$10/ton	—	—	—	—

Orderbook & backlog

Downstream backlog increased 15.5% Q4 FY26

5% sequentially

Precast Bookings up 12.6% Q4 FY26

up YoY

Precast Backlog up roughly 3% Q4 FY26

up 4% versus Q3

Average backlog pricing also trended higher.

Product announcements

Product	Type	Timeline	Details
Tensar geo grid line	launch	well into its startup
Galvabar corrosion-resistant product facility	launch	beginning this November

Capital programs

Steel West Virginia Micromill underway

Commissioning and start-up activities continue to progress well. Team is executing a disciplined commissioning process. Expected to be breakeven after about 6 months of start-up. FY27 production expected to be under 200,000 tons.

Tensar geo grid line (Black Oklahoma) underway

Benefit:increased geogrid production capacity

Well into its startup phase, will enhance service levels and fuel growth in higher-value nonresidential and infrastructure applications.

Galvabar facility (Tennessee) underway

Benefit:more than double Galvabar production capacity

Construction progressing, expected to expand presence in an attractive higher-margin market segment.

Risks & headwinds

Residential market softness Q4 FY26, near term (Q1 FY27)

impacted precast business, lower volumes and regional margin mix headwinds

Mitigation:Nonresidential and infrastructure demand filling backlog, strong pricing, successful integration of precast operations.

Unplanned outage at Galvabar facility Q4 FY26

affected shipments

Mitigation:Outage is resolved, customer demand remains robust with positive bookings, backlog, and pricing trends.

European energy costs increase Q4 FY26, Q1 FY27

increased ~$10 per ton in Q4 FY26, potentially increase by a further $10 to $15 per ton in Q1 FY27

Mitigation:Strong hedging process with ~50% of electricity hedged through long-term purchase agreements, focus on consumption efficiency.

Inventory overhang in Europe 4-6 months to clear

caused by pre-buying ahead of CBAM and safeguards

Mitigation:Optimistic that margins will expand as inventory filters through, with benefits of CBAM and tariff rate quota being realized more meaningfully by calendar year-end.

What to watch in Q1 FY27

Precast Business Performance

Q1 FY27

Current Q4 Adjusted EBITDA $57.1M, bookings up 12.6% sequentially, backlog up 4% sequentially

Target Improved adjusted EBITDA, continued backlog growth

Why it matters

Precast is a key growth area, and its performance impacts overall Construction Solutions Group results and the FY29 target.

Precast generated adjusted EBITDA of $57.1 million during the quarter. And excluding the purchase accounting impact has contributed roughly $150 million of adjusted EBITDA since our acquisition. ... Bookings were up year-over-year and increased 12.6% sequentially. Backlog levels are up roughly 3% versus the prior year and 4% versus Q3.

Find out whether CMC delivers this. Inve re-checks your case every morning.

Q&A highlights

Given Q4 precast EBITDA was below expectations due to residential softness, is the annual run rate EBITDA target of $240M-$250M still achievable for FY27?

Peter Matt confirmed confidence in achieving the target, citing strong backlogs, integration progress, and momentum. He noted that non-residential and infrastructure demand is offsetting residential weakness, and pricing remains strong. He acknowledged seasonal weakness in Q1 but expressed overall optimism.

“We believe it is. And we think that it's a good target for this year. When we look at the backlogs in the business, when we look at the progress we've had on integration, and kind of overall momentum, we feel like we can achieve that.”

asked by Samuel McKinney · answered by Peter Matt

3 min read 7 chapters

Detailed narrative

Strategic Progress and Financial Performance

Fiscal 2026 was a defining year for CMC, marked by significant progress in executing its strategy to strengthen earnings quality, expand margins, reduce leverage, and enhance free cash flow. Core EBITDA for the full year increased to approximately $1.4 billion, up from $837 million in fiscal 2025, with core EBITDA margin expanding 80 basis points to 14.5%.

This performance was driven by the Transform Advance and Grow (TAG) program, growth investments, and successful integration of precast acquisitions.

North American Steel Group Strength

The North American Steel Group delivered strong performance in Q4 FY26, with adjusted EBITDA increasing 25.2% sequentially to $317 million. This was fueled by TAG benefits, metal margin expansion, and a 27.5% year-over-year growth in merchant bar shipments, demonstrating the flexibility of the Arizona 2 plant.

Downstream product volumes also grew 8.5% year-on-year, reflecting CMC's ability to serve larger, more complex projects in sectors like energy and data centers.

Construction Solutions Group and Precast Dynamics

Q4 FY26 results for the Construction Solutions Group, particularly the precast business, were below expectations due to residential softness in certain Southeastern markets. Despite this, precast generated $57.1 million in adjusted EBITDA for the quarter, contributing roughly $150 million since acquisition (excluding purchase accounting).

Leading indicators remain positive, with bookings up 12.6% sequentially and backlog levels increasing 4% versus Q3, supported by strong nonresidential and infrastructure demand.

Growth Investments and Capital Deployment

Fiscal 2027 marks a transition for CMC's growth investments, shifting from capital deployment to return generation. The Steel West Virginia micro mill is progressing with commissioning, expected to ramp up over 12 months and reach breakeven within 6 months. The Tensar geo grid line in Black Oklahoma is starting up, and the Galvabar facility in Tennessee is expected to begin first production in November, significantly increasing capacity for corrosion-resistant products.

Operating Environment and Market Dynamics

The demand environment for early-stage construction products remains constructive, with elevated infrastructure demand supported by federal and state funding, and strong nonresidential activity in data centers, power generation, and institutional markets. Domestic rebar market remains consolidated, and trade enforcement measures, including Section 232 and finalized trade cases, have effectively reduced unfairly traded imports, supporting a more rational competitive environment.

Capital Allocation and Shareholder Returns

CMC has strengthened its balance sheet, reducing net leverage to 1.9x, below its 2x target. Capital expenditures are projected to decline by nearly $200 million to $400 million in FY27, leading to improved free cash flow and conversion. The company intends to accelerate its share repurchase program, with approximately $700 million remaining authorization, reflecting confidence in its outlook and the compelling value of its shares.

European Market Outlook

Underlying business fundamentals in Europe are improving, with metal margin expanding $32 per ton year-over-year in Q4 FY26. The implementation of CBAM and enhancements to the tariff rate quota framework are creating a more favorable trade environment. Despite an anticipated increase in energy costs of $10 to $15 per ton in Q1 FY27, CMC expects a meaningful sequential increase in Europe's adjusted EBITDA, supported by its strong hedging strategy for electricity.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.