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What's in Store for Century Aluminum (CENX) in Q2 Earnings?

Century Aluminum CENX is scheduled to report second-quarter 2017 results after the closing bell on Aug 2.

Century Aluminum posted a net loss of $15.1 million or 17 cents per share in first-quarter 2017, lower than a net loss of $16.2 million or 19 cents per share it posted a year ago. Barring one-time items, Century Aluminum’s adjusted net loss was 5 cents per share in the reported quarter, narrower than the Zacks Consensus Estimate of a loss of 15 cents. Results in the reported quarter were affected by a $14 million unrealized loss associated with forward and derivative contracts.

The company has outperformed the Zacks Consensus Estimate in three of the trailing four quarters while missing in one.

Shares of Century Aluminum have moved up 20.2% in last three months, outperforming the 3.2% gain of its industry.


Let’s see how things are shaping up for this announcement.

Factors to Consider

Century Aluminum, in its first-quarter earnings call, noted that the company’s results should strengthen in the prevailing market environment. However, significant trade flows due to illegally subsidized excess capacity and production in China continue to distort the company’s markets in the U.S. and Europe.

The company, however, is seeing healthy demand in its markets. Century Aluminum also said that fair trading conditions along with its market position in the U.S. and Europe are expected to boost shareholders value.

Century Aluminum is implementing a number of actions to reduce costs and preserve cash amid a weak pricing environment. The company expects to achieve annualized savings of $40 million to $65 million through these measures that includes operating expense cuts and headcount reduction. It is also likely to benefit from strong aluminum demand across automotive and aerospace markets as well as acquisitions.

However, Century Aluminum is still facing a difficult pricing environment, which may continue to impact its bottom line adversely. High levels of exports from China is keeping aluminum prices under pressure. The company is also seeing high power costs.

Century Aluminum Company Price and EPS Surprise


Century Aluminum Company Price and EPS Surprise | Century Aluminum Company Quote

Earnings Whispers

Our proven model does not conclusively show that Century Aluminum is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:

Zacks ESP: Earnings ESP for Century Aluminum is currently pegged at -10.35%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 26 cents and 29 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Century Aluminum currently carries a Zacks Rank #3, which when combined with a negative ESP, makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:

The Chemours Company CC has an Earnings ESP of +4.44% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical Corporation WLK has an Earnings ESP of +5.04% and a Zacks Rank #2.

Iamgold Corporation IAG has an Earnings ESP of +300.00% and carries a Zacks Rank #3.

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Century Aluminum Company (CENX): Free Stock Analysis Report
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