Commercial Metals Company closed fiscal 2026 with a clear beat. Adjusted earnings of $2.09 per share topped the $1.97 consensus by 6.1%. Revenue of $2.658 billion beat the $2.45 billion estimate by 8.5%. Earnings grew 52.6% year over year on 25.7% revenue growth, and the sequential trend kept improving. Adjusted EPS rose from $1.16 in the fiscal second quarter to $1.73 in the third and $2.09 in the fourth. Core EBITDA climbed in step, from $297.5 million to $353.6 million to $393.7 million. The central tension is that the quarter's strength came almost entirely from the legacy North American steel franchise. The precast acquisition, which underpins the company's repositioning as an early-stage construction platform, fell short of the targets management had reiterated all year.
The steel numbers were strong. North America Steel Group adjusted EBITDA jumped 25% sequentially and 32.6% year over year to $317.5 million, and segment margin widened 220 basis points from the third quarter to 16.4%. Metal margin reached $652 per ton, up $42 sequentially and $84 from a year ago. Rising selling prices drove the gain, helped by modestly lower scrap costs. Merchant bar shipments surged 27.5% year over year on industrial and data-center demand and new Arizona 2 capacity. The quality of the GAAP beat deserves some scrutiny. Net earnings of $1.91 per share benefited from an unusually low effective tax rate of roughly 7%, and management guided fiscal 2027 to about 24%. That reset is a real headwind to per-share earnings growth, even if cash taxes stay minimal.
Precast is where the story weakened. The business generated $57 million of adjusted EBITDA in the quarter, about $20 million below what prior guidance implied. Full-year contribution since acquisition came to roughly $150 million excluding purchase accounting, against a $165-175 million target held through three consecutive quarters. Management blamed Southeast residential softness, with residential activity running at roughly 50-60% of normal, and said the same weakness is showing up in fabrication. The offsets are credible but forward-looking. Precast bookings rose 12.6% sequentially, backlog grew 3-4%, and pricing kept moving higher. Separately, the Steel West Virginia micro mill has begun hot commissioning, but its fiscal 2027 volume outlook was cut to under 200,000 tons from 250,000-300,000. An unplanned Galvabar outage also dented Performance Reinforcing Steel.
The call did raise several metrics that matter. TAG exited the year at more than $250 million of gross run-rate benefits, well above the $150 million target repeated through the year, with another $100 million targeted by the end of fiscal 2027. Net leverage adjusted for acquisitions fell to 1.9x from 2.5x in the first quarter, beating the mid-2027 target. That ratio relies on an annualized precast EBITDA figure of $212 million, however, which looks generous next to the business's recent shortfall. With fiscal 2027 capex guided down to about $400 million from roughly $580 million, management plans a free cash flow inflection. It also plans to pull forward the roughly $700 million buyback authorization originally planned over three years. Downstream backlog up 15.5% year over year and declining South Korean rebar imports support the demand side.
Near-term guidance is less inspiring. First-quarter North America Steel EBITDA is expected to be roughly flat, as better pricing absorbs higher scrap, startup costs, and seasonal volume softness. Construction Solutions is guided down sequentially, with precast down mid-to-high single digits. Europe should improve meaningfully, but partly because of a $10-15 million CO2 credit. That region also faces higher energy costs and a safeguard-related pre-buy inventory overhang that management expects to take four to six months to clear.
Investors were already cooling on the name heading into the report. Earnings Whispers sentiment remained positive but weakened, slipping from 0.236 to 0.150. Shares have fallen 9.8% since the open after the June report, from $72.47 to $65.37, and sit about 6.1% below the 200-day moving average of $69.60. Price and AVWAP trend readings are both negative, consistent with a market that has been discounting the steel strength rather than rewarding it.
The bottom line is that CMC delivered a genuine beat-and-accelerate quarter on the back of steel pricing, merchant bar volume, and TAG execution. Its balance sheet and capital-return plans also improved faster than promised. Bears still have legitimate ammunition. The acquisition meant to diversify earnings missed its targets, West Virginia is ramping more slowly, the tax rate is resetting sharply higher, and first-quarter guidance points to a pause. Precast must convert its improving bookings into results before the market is likely to give the new portfolio full credit.