Commercial Metals Co posted a narrower-than-expected third-quarter loss, but the steel and metal products maker warned of difficult domestic market conditions for the remainder of 2009.
Global metal markets may have tested the bottom during the quarter and though some recovery has occurred, the markets, overall, remain fragile. Any volume improvement in the quarter was seasonal and not reflective of any stimulus effect, Chief Executive Murray McClean said.
For the quarter ended May 31, the Irving, Texas-based company reported a net loss of $13.1 million, or 12 cents a share, compared with a profit of $59.5 million, or 51 cents a share, a year earlier.
The company reported a loss of 10 cents a share from continuing operations. Analysts were expecting a loss of 14 cents a share, according to Reuters Estimates.
Quarterly results included a LIFO income of $29 million, or 26 cents a share. The company's LIFO (last in, first out) method to account for inventories understates net earnings in a rising steel and scrap price environment compared with peers.
Net sales at the company more than halved to $1.34 billion.
The company expects fourth-quarter results to be similar to that of the third quarter.
Commercial Metals expects steel prices to stabilize and recover modestly in coming months, but sees tougher market conditions in Europe compared with the United States.
Shares of the company rose to a high of $15.07 but pared some gains to trade up 17 cents at $14.38 Tuesday morning on the New York Stock Exchange.
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