Century (CENX) Up 14% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Century Aluminum (CENX). Shares have added about 14% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Century due for a pullback? 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 catalysts.
Century Aluminum's Q3 Earnings & Sales Beat Estimates
Century Aluminum logged a loss of 45 cents per share in third-quarter 2023 compared with the year-ago quarter's earnings of 43 cents.
Barring one-time items, the adjusted loss was 13 cents per share in the reported quarter, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The company benefited from lower input prices and other cost savings, somewhat countered by lower aluminum prices.
Revenues and Shipments
The company generated net sales of $545.2 million in the reported quarter, down around 14% year over year. The figure, however, beat the Zacks Consensus Estimate of $542.3 million.
Primary aluminum shipments were 171,995 tons, down around 1% year over year. It lagged the consensus estimate of 174,920 tons.
Financials
At the end of the quarter, the company had cash and cash equivalents of $70.3 million, up 6.5% year over year.
Net cash used by operating activities was $39.6 million for the nine months ended Sep 30, 2023.
Outlook
The company anticipates that its Adjusted EBITDA for the fourth quarter will be in the range of $0-$10 million, primarily due to a decline in LME prices, partially mitigated by lower raw material costs.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -10% due to these changes.
VGM Scores
At this time, Century has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Century has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Century belongs to the Zacks Metal Products - Procurement and Fabrication industry. Another stock from the same industry, Timken (TKR), has gained 5.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Timken reported revenues of $1.14 billion in the last reported quarter, representing a year-over-year change of +0.6%. EPS of $1.55 for the same period compares with $1.52 a year ago.
Timken is expected to post earnings of $1.21 per share for the current quarter, representing a year-over-year change of -0.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Timken. Also, the stock has a VGM Score of B.
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Century Aluminum Company (CENX) : Free Stock Analysis Report
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