Century Aluminum Earnings: Here’s Why Investors are Ambivalent Now

Century Aluminum Co. (NASDAQ:CENX) had a loss and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company.

Century Aluminum Co. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased to $-0.39 in the quarter versus EPS of $-0.10 in the year-earlier quarter.

Revenue: Rose 2.56% to $331.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Century Aluminum Co. reported adjusted EPS loss of $0.39 per share. By that measure, the company missed the mean analyst estimate of $-0.16. It beat the average revenue estimate of $302.95 million.

Quoting Management: “We are managing through a period of uncertainty in our industry,” commented Michael Bless, President and Chief Executive Officer. “The slowing in China’s economy, the extent and impact of which remain difficult to determine, has clearly begun to impact European and other developed and developing economies. In contrast, our U.S. customer markets remain generally sound, with particular strength in the transportation and construction sectors. On a macro level, the relative strength of the U.S. dollar, caused in part by the recent rise in interest rates, has pressured the price of all commodities. Lastly, industry participants are trying to assess the potential impact of the recent proposal by the London Metals Exchange for changes in the warehousing rules. In summary, we are prepared to operate through this challenging environment in the near-term, but remain confident that attractive demand coupled with constrained supply outside of China will push aluminum prices upward over time.”

Key Stats (on next page)…

Revenue increased 3.31% from $321.27 million in the previous quarter. EPS increased to $-0.39 in the quarter versus EPS of $-0.02 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.03 to a loss $0.16. For the current year, the average estimate has moved down from a loss of $0.02 to a loss of $0.28 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)