Noranda Aluminum Holding Earnings: Here’s Why Investors are Exhilarated

Noranda Aluminum Holding Corp. (NYSE:NOR) had a loss and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 23.94%.

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Noranda Aluminum Holding Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.02 in the quarter versus EPS of $0.18 in the year-earlier quarter.

Revenue: Decreased 4.27% to $338.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Noranda Aluminum Holding Corp. reported adjusted EPS loss of $0.02 per share. By that measure, the company beat the mean analyst estimate of $-0.06. It missed the average revenue estimate of $339.47 million.

Quoting Management: “We are pleased with our first quarter 2013 performance, which demonstrated improved operating reliability across our integrated upstream platform,” said Layle K. (Kip) Smith, Noranda`s President and Chief Executive Officer. “We saw stable overall demand with improved value-added and fabrication premiums for our key aluminum products during first quarter 2013.” “Although the average LME aluminum price and Midwest premium for first quarter 2013 were unchanged compared to fourth quarter 2012, because of uncertain macroeconomic conditions LME aluminum prices remain below long-term equilibrium levels, and have declined since mid-February,” said Smith. “In the current price environment, we are evaluating and taking appropriate actions to manage our liquidity position and provide for prudent investment in long-term growth. In March 2013, we refinanced the $275 million balance of the senior floating rate notes due 2015. After this refinancing, we have no funded-debt maturities before 2019. When we consider our debt maturity profile, our more reliable operations, an outlook for stable overall demand, and the prospects of further modest improvements in the US economy, we are encouraged by our opportunities for 2013 and our capability to pursue them, despite the recent decline in the LME aluminum price.”

Key Stats (on next page)…

Revenue increased 1.65% from $332.9 million in the previous quarter. EPS increased to $-0.02 in the quarter versus EPS of $-0.12 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 $0.16 to a loss $0. For the current year, the average estimate has moved down from a profit of $0.62 to a loss of $0.07 over the last ninety days.

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