Century Aluminum (CENX) Q1 Loss Narrower than Expected

Century Aluminum CENX slipped to a loss in the first quarter of 2016. The company recorded a net loss of $16.2 million (or 19 cents per share) in the reported quarter. Last year, the company had posted a profit of $73.8 million (or 76 cents per share) a year ago.

Barring one-time items, Century Aluminum’s adjusted net loss was 23 cents per share in the quarter, narrower than the Zacks Consensus Estimate of a loss of 34 cents.

Revenues and Shipments

The company logged revenues of $318.9 million in the reported quarter, down around 45.8% year over year. Sales also missed the Zacks Consensus Estimate of $352 million. Shipments of primary aluminum in the quarter were 182,619 tons, down roughly 25.5% from 245,258 tons shipped a year ago.

Financials

Century Aluminum ended the quarter with cash and cash equivalents of around $126.5 million, down roughly 44.2% year over year. Net cash provided by operating activities was $14.9 million in the first quarter of 2016, down around 87.2% year over year. The company received $12.5 million in the quarter resulting from the earnout provision related to the Mt. Holly smelter takeover.

Market Sentiment

The company's CEO, Michael Bless, stated that capacity additions and production growth in China continue to persist despite weak domestic demand. The excess production, backed by illegal subsidies, continues to support exports which have caused material damage to its industry. The company remains hopeful that only strong enforcement of international trade laws will lead to a fair and even playing field for the industry. Century continues to look for all options, including legislation, aimed at allowing Mt. Holly to buy all of its power from the competitive market

Zacks Rank

Century Aluminum currently holds a Zacks Rank #2 (Buy).

Other well-ranked companies in the basic materials sector include Global Brass and Copper Holdings, Inc. BRSS, SKF AB SKFRY and Alamos Gold, Inc. AGI, all carrying a Zacks Rank #2.

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