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Why Is Century Aluminum (CENX) Down 13.1% Since the Last Earnings Report?

A month has gone by since the last earnings report for Century Aluminum Company CENX. Shares have lost about 13.1% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stocks next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Century Aluminum's Q4 Loss Narrower than Expectations

Century Aluminum posted a net loss of $168.5 million or $1.93 per share in fourth-quarter 2016, wider than a net loss of $43.1 million or $0.50 per share it posted a year ago.

The results in the reported quarter were hurt by a $152.2 million of impairment charge related to the Helguvik project in Iceland.

Barring one-time items, Century Aluminum’s adjusted net loss was $0.12 per share in the reported quarter, narrower than the Zacks Consensus Estimate of a loss of $0.16.

Revenues and Shipments

The company logged revenues of $339.8 million in the reported quarter, down around 11% year over year. Sales missed the Zacks Consensus Estimate of $345.8 million. Shipments of primary aluminum in the quarter were 183,210 tons, down from 211,710 tons shipped a year ago.  The decline in revenues and volumes was mainly due to curtailment actions.

FY16 Results

For full-year 2016, net loss was $252.4 million or $2.90 per share, wider than net loss of $59.3 million or $0.68 per share in 2015.  

Sales for the year were $1,319.1 million, down around 32% year over year, affected by lower prices for primary aluminium and curtailment actions.

Financials

Century Aluminum ended the quarter with cash and cash equivalents of around $132.4 million, up roughly 15% year over year. Net cash from operating activities in the quarter was $22.6 million.

Outlook

Century Aluminum’s President and CEO Michael Bless stated that the company made progress on a number of strategic fronts including the sale of the remaining assets at its original operating smelter in Ravenswood, WV. Bless also noted that Century Aluminum has excellent opportunities in its markets in the U.S. and Europe and the company will remain committed to invest in modest high return projects not dependent upon the prices of aluminum.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.

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Century Aluminum Company Price and Consensus

 

Century Aluminum Company Price and Consensus | Century Aluminum Company Quote

VGM Scores

At this time, Century Aluminum's stock has a strong Growth Score of 'A', however its Momentum is lagging a bit with 'B'. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is more suitable for growth than momentum investors.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. The stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months.


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