A month has gone by since the last earnings report for Century Aluminum (CENX). Shares have lost about 10.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Century 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 Earnings & Sales Beat Estimates in Q4
Century Aluminum reported net loss of $65 million or 74 cents per share in fourth-quarter 2018, against net income of $35.8 million or 37 cents in the year-ago quarter.
Barring one-time items, adjusted loss came in at 43 cents per share in the quarter, which was narrower than the Zacks Consensus Estimate of a loss of 54 cents.
Revenues and Shipments
The company generated revenues worth $486.9 million in the fourth quarter, up around 12.2% year over year. The figure beat the Zacks Consensus Estimate of $478.1 million.
Shipments of primary aluminum were 199,466 tons, up 5.5% from 189,000 tons shipped in the year-ago quarter.
In 2018, adjusted loss totaled $13 million or 14 cents per share, against adjusted earnings of $34.7 million or 36 cents.
Net sales increased 19.1% year over year to $1,893.2 million. Total shipments inched up 0.9% year over year to 749,850 tons.
As of Dec 31, 2018, the company had cash and cash equivalents of $38.9 million, down 76.7% year over year. Net cash used in operating activities was $69.1 million during the year.
Per the company, the relationship between aluminum and alumina prices had negatively impacted its financial performance. Also, cash flows were affected by capital spending for the Hawesville restart project, which is scheduled for restart.
The company has concluded a two-year extension to the 75% market power-based contract at Mt. Holly. Century Aluminum is committed to achieve full market access, which will facilitate full production.
The company expects financial performance in the first quarter to be weighed by high realized alumina prices. Moreover, it anticipates EBITDA to be positive at spot prices and liquidity to remain strong starting second-quarter 2019. Additional production volume at Hawesville is expected to strengthen its financial position along with a reduction in the capital spending required for this project.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -97.03% due to these changes.
At this time, Century has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions 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.
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