09:04 AM EST, 01/06/2025 (MT Newswires) -- Commercial Metals' ( CMC ) fiscal first-quarter earnings and sales fell year over year amid economic headwinds impacting demand and litigation-related costs, while the metal product manufacturer projects a sequential decline in results for the ongoing three-month period.

The company's adjusted earnings fell to $0.78 a share for the quarter ended Nov. 30 from $1.49 the year before, but were in line with the FactSet-polled consensus. Sales decreased to $1.91 billion from nearly $2 billion last year, but topped the Street's view for $1.85 billion.

"Financial results continued to be hindered by economic uncertainty that has weighed on new construction activity, pressuring steel pricing and margins," Chief Executive Peter Matt said in a statement. "We remain confident that this weaker demand environment will be temporary as we expect the underlying drivers across infrastructure, non-residential and residential end markets will provide multiyear support for our business."

Revenue from the North America steel group segment edged down to $1.52 billion from $1.59 billion in the prior-year quarter. Shipment volumes of finished steel, which include steel and downstream products, increased 4.4% annually. Average selling prices for both products were down during the first quarter.

Europe steel group sales slipped to $209.4 million from $225.2 million last year as long-steel consumption remained "substantially below" historic levels, while import flows from European countries seeking an outlet for products not consumed within home markets increased, according to the company. Revenue in the emerging businesses group segment declined 4.4% to $169.4 million, impacted by an increased sales mix of lower margin products and several large project delays within the group's Tensar division.

Costs and operating expenses rose to $2.14 billion from $1.78 billion last year. The company said it recorded an after-tax charge of $265 million during the quarter to reflect the verdict reached in a litigation.

The company anticipates financial results in its second quarter to "decline from the first-quarter level," according to Matt. The group forecasts finished steel shipments within its North America segment to "follow normal seasonal trends," while results in the emerging businesses division are expected to be "impacted by normal seasonality," the CEO said.

"Outside of construction, measures of both big and small business confidence have improved significantly over the last two months," Matt said. "The palpable shift in sentiment gives us confidence that current softness is transient and that we should soon enter a period of renewed strength in our core markets."