Ferroglobe (GSM) Q2 Earnings Beat Estimates, Revenues Dip Y/Y
Ferroglobe GSM reported adjusted earnings per share of 30 cents in second-quarter 2023, which surpassed the Zacks Consensus Estimate of adjusted earnings of 10 cents. The bottom-line figure marks a 74% plunge from earnings of $1.14 per share in the prior-year quarter, reflecting the impacts of lower shipments for its product lines and a decline in average realized prices.
Including one-time items, the company reported earnings of 17 cents per share in the quarter under review, an 11% increase from earnings of 11 cents per share in the year-ago quarter.
GSM’s revenues plunged 46% year over year to $456 million in the quarter under review, owing to lower shipments and average realized prices. However, the top line beat the Zacks Consensus Estimate of $442 million.
Silicon metal revenues in the second quarter were $195 million, down 45% from the prior-year’s second quarter. The average realized selling price was down 32% and total shipments decreased 19.6% on a year-over-year basis.
Ferroglobe PLC Price, Consensus and EPS Surprise
Ferroglobe PLC price-consensus-eps-surprise-chart | Ferroglobe PLC Quote
Silicon-based alloy revenues in the quarter under review were $133 million, down 43.5% year over year. The average realized selling price and total shipments of silicon-based alloys decreased 34.2% and 14.2%, respectively, year over year.
Manganese-based alloy revenues in the quarter were $78 million, down 59.5% from the last year’s comparable quarter. The average realized selling price declined 35.5% year over year and total shipments plunged 35.5%.
Operational Update
Raw materials and energy consumption for production was $252 million in the second quarter of 2023, compared with $370 million in the second quarter of 2022.
Operating profit was around $63 million in the quarter, a 76% drop from $265 million in the prior-year quarter. Adjusted EBITDA was $106 million, compared with $303 million in the year-ago quarter. The adjusted EBITDA margin was 23.2% in the quarter under review, compared with 36.1% in the prior year’s second quarter.
Financial Position
Ferroglobe ended the second quarter of 2023 with total cash balance of $363 million, compared with $307 billion at the end of the last year’s quarter. Cash flow from operations during the first half of 2023 was $158 million, down from $231 million reported in the comparable period last year.
FSM’s net debt declined to $37 million at the end of the second quarter, the lowest net debt in the company’s history. Subsequent to the quarter end, the company continued its deleveraging efforts and redeemed $150 million of Senior Secured Notes due in 2025.
Guidance
Despite weak end markets, the company’s disciplined costs controls are expected to drive margin performance in 2023. GSM expects adjusted EBITDA in the range of $270 million to $300 million this year.
Price Performance
Ferroglobe’s shares have declined 30.3% over the past year compared with the industry’s 6.4% fall.
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Zacks Rank & Stocks to Consider
Ferroglobe currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, PPG Industries, Inc. PPG and Bunge Limited BG. CRS and PPG sport a Zacks Rank #1 (Strong Buy) at present, and BG has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 10%. The Zacks Consensus Estimate for CRS’s fiscal 2024 earnings is pegged at $3.23 per share. The consensus estimate for 2023 earnings has moved 12% north in the past 60 days. Its shares have gained 49% in the last year.
The Zacks Consensus Estimate for PPG Industries’ fiscal 2023 earnings per share is pegged at $7.47, indicating growth of 23.5% from the prior-year actual. Earnings estimates have moved 3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 7.3%. PPG’s shares have gained 1% in the past year.
Bunge has an average trailing four-quarter earnings surprise of 20.4%. The Zacks Consensus Estimate for BG’s 2023 earnings is pegged at $12.13 per share. The consensus estimate for 2023 earnings has moved 4% north over the past 60 days. BG’s shares have gained 12% in the last year.
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