Commercial Metals (CMC) Financials

Commercial Metals’ financial results improved materially through fiscal 2026. Fourth-quarter revenue reached $2.66 billion, up from $2.11 billion in Q4 2025, while net income increased to $212.5 million from $151.8 million. Diluted EPS rose to $1.90 from $1.33. The improvement followed a difficult Q1 2025 that included a $350 million special charge, but profitability has since recovered across each quarter of fiscal 2026.

Margins also strengthened modestly. Q4 gross profit was $501.5 million, representing an 18.9% gross margin, compared with 18.6% a year earlier. Operating income increased to $204.6 million, and the operating margin was approximately 7.7%. The company’s results suggest stronger sales volumes and improved operating leverage, although the business remains exposed to conditions in the cyclical steel and metals markets.

Cash generation was a major strength in the latest quarter. Operating cash flow rose to $455.9 million in Q4 2026, compared with $315.2 million in Q4 2025. After $175.6 million of capital spending, estimated free cash flow was approximately $280.4 million. Commercial Metals used this cash to repay debt, repurchase shares and pay dividends, while still increasing its cash balance during the quarter.

The balance sheet is more complex than it was a year earlier. As of May 31, 2026, Commercial Metals held $559.8 million of cash and $3.40 billion of total debt, compared with roughly $1.35 billion of total debt at May 31, 2025. Goodwill and intangible assets also increased significantly, indicating that acquisitions or purchase-accounting adjustments have expanded the asset base. The company retains substantial equity of $4.53 billion and a current ratio above 2, but investors should monitor leverage and integration risk.

• Revenue momentum improved: Q4 2026 revenue increased approximately 26% year over year to $2.66 billion, and Q3 revenue was also substantially above the prior-year period.
• Profitability rebounded: Q4 net income rose about 40% year over year to $212.5 million, while diluted EPS increased to $1.90.
• Operating cash flow strengthened: Quarterly operating cash flow reached $455.9 million in Q4 2026, the strongest reported quarter in the supplied fiscal 2026 data.
• Free cash flow remained positive: Q4 operating cash flow comfortably exceeded $175.6 million of capital expenditures, leaving approximately $280 million of estimated free cash flow.
• Shareholder returns continued: Commercial Metals repurchased $26.7 million of stock and paid $22.1 million in dividends during Q4, with quarterly dividends per share increasing from $0.16 in 2024 to $0.20 by Q3 2026.
• Liquidity appears adequate: Cash and equivalents increased to $559.8 million at May 31, 2026, while total current assets of $3.46 billion exceeded current liabilities of $1.49 billion.
• Capital investment is elevated: Quarterly capital expenditures increased to $175.6 million in Q4 2026 from $108.9 million in Q4 2025. This may support future growth, but investors should watch whether new investments generate sufficient returns.
• Cash-flow data contains volatility: The Q2 2026 statement reported unusually large investing and financing movements, including a $2.64 billion investing cash outflow, so investors should review the company’s filed statements for transaction-specific details before extrapolating quarterly trends.
• Debt increased materially: Total debt was approximately $3.40 billion at May 31, 2026, up sharply from approximately $1.35 billion a year earlier. Higher leverage could increase interest costs and reduce financial flexibility during a weaker metals cycle.
• Acquisition-related balance-sheet risk increased: Goodwill rose to $2.14 billion and intangible assets to $463.9 million by Q3 2026. These balances create potential impairment and integration risks if acquired operations underperform.