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Century Aluminum (CENX) Q3 Earnings Miss, Sales Beat Estimates

Century Aluminum Company CENX reported net income of $20.8 million or 22 cents per share in third-quarter 2017, against a net loss of $58.3 million or 67 cents it posted a year ago.

The results in the reported quarter were aided by a $5.5 million gain on the settlement associated with retirement benefits for former employees of the Ravenswood facility and a $0.9 million gain related to LME forward sales.

Barring one-time items, Century Aluminum’s adjusted earnings were 15 cents per share in the quarter, which missed the Zacks Consensus Estimate of 23 cents.

Century Aluminum Company Price, Consensus and EPS Surprise


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

Revenues and Shipments

The company registered revenues of $400.6 million in the reported quarter, up around 19.9% year over year. The figure surpassed the Zacks Consensus Estimate of $392 million. Shipments of primary aluminum in the quarter were 184,974 tons, up from 182,429 tons shipped a year ago.  


Century Aluminum cash position increased 48.1% year over year to $174.2 million owing to strong conversion of earnings to cash flow. Net cash provided by operating activities in the quarter was $47.4 million.


According to the company, market fundamentals and demand across key markets in the United States and Europe remain favorable.  

Commodity prices have increased of late, including alumina, aluminum, pitch and petroleum coke. Century Aluminum expects to witness the impact of each of these prices in fourth-quarter 2017. Changing regulatory environment in China remains the main driving force behind these dynamics.

Over the mid-to-longer term, the direction of the metal prices is expected to depend upon China’s commitment to eliminate illegally subsidized overproduction and implement long-term discipline.

Price Performance

Century Aluminum’s shares have declined 19.6% in the last three months underperforming the 4.4% growth recorded by its industry.  


Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Koppers Holdings Inc. KOP, FMC Corporation FMC and Westlake Chemical Corporation WLK. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Koppers has an expected long-term earnings growth rate of 18%.

FMC has an expected long-term earnings growth rate of 11.3%.

Westlake Chemical has an expected long-term earnings growth rate of 8.3%.

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