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Century Aluminum (CENX) Earnings, Sales Beat Estimates in Q2

Zacks Equity Research

Century Aluminum Company CENX recorded a net loss of $20.7 million or 23 cents per share in second-quarter 2019, against a profit of $19.4 million or 20 cents in the year-ago quarter.

The bottom line in the reported quarter was hurt by a $9-million charge for net realizable value of inventory adjustments and a $4.3-million loss on the sale of the company’s investment in BHH located in China.

Barring one-time items, adjusted loss was 17 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 29 cents.

The company logged revenues of $473.1 million in the quarter, down around 0.7% year over year. The figure beat the Zacks Consensus Estimate of $465.1 million.

Century Aluminum Company Price, Consensus and EPS Surprise

 

Century Aluminum Company Price, Consensus and EPS Surprise

Century Aluminum Company price-consensus-eps-surprise-chart | Century Aluminum Company Quote

Shipments & Pricing

Shipments of primary aluminum were 203,380 tons, up around 13% year over year. On sequential comparison basis shipment fell 1% due to timing of deliveries.

The company saw lower London Metal Exchange (LME) aluminum prices in the reported quarter compared to the previous quarter. Cash LME prices averaged $1,793 per ton in the quarter, down 4% on a sequential comparison basis.

Financials

At the end of the quarter, the company had cash and cash equivalents of $25.7 million, down around 79% year over year. Net cash used in operating activities was $25.6 million for the first half of 2019.

Outlook

Per management, demand for aluminum products remains strong in the United States. The company noted that global aluminum inventories have been declining steadily and have fallen to historically low levels.  

The company sees an aluminum supply deficit of more than 1 million tons globally for full-year 2019. It expects the supply deficit to result in the sustained de-stocking of inventories and lead to higher LME aluminum prices over the long term. Century Aluminum also noted that alumina prices have declined to a level which it believes to be in the historical fair value range.

The company also said that its rebuild program at the Hawesville plant remains on schedule and budget. It expects to return the plant to its full production capacity next year.

Price Performance

Century Aluminum’s shares have lost 45.1% in the past year compared with the industry’s 28.3% decline.



 

Zacks Rank & Key Picks

Century Aluminum currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include SSR Mining Inc. SSRM, Kinross Gold Corporation KGC and Flexible Solutions International Inc FSI.

SSR Mining has an estimated earnings growth rate of 134.8% for the current year and carries a Zacks Rank #1 (Strong Buy). Its shares have rallied 59% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has projected earnings growth rate of 100% for the current year and carries a Zacks Rank #1. The company’s shares have gained 34% in a year’s time.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current fiscal year and carries Zacks Rank #2 (Buy). Its shares have surged around 122% in the past year.

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