Why Is Century (CENX) Down 22.5% Since Last Earnings Report?

A month has gone by since the last earnings report for Century Aluminum (CENX). Shares have lost about 22.5% 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 catalysts.

Century Aluminum’s Q2 Earnings and Sales Lag Estimates

Century Aluminum reported a profit of $35.1 million or 36 cents per share in second-quarter 2022, compared with a loss of $35.1 million or 39 cents per share in the year-ago quarter.

Barring one-time items, adjusted earnings were 30 cents per share, which missed the Zacks Consensus Estimate of 71 cents.

Revenues and Shipments

The company generated net sales of $856.6 million in the second quarter, up around 62% year over year. The figure missed the Zacks Consensus Estimate of $928 million.

Shipments of primary aluminum were 214,084 tons, up around 12% year over year. This compares to the consensus estimate of 221,050 tons million and our estimate of 220,800 tons. Shipments also rose 1% sequentially, driven by higher volumes at Mt. Holly.

Financials

At the end of the quarter, the company had cash and cash equivalents of $30 million, a roughly three-fold year-over-year increase.

Net cash provided by operating activities was $68.6 million in the six months ended Jun 30, 2022 against net cash used of $87.9 million in the year-ago period.

Outlook

Century Aluminum stated that it continues to position it to benefit from long-term trends in value-added aluminum products through its Grundartangi casthouse and North America casthouse debottlenecking projects. Global energy prices remain elevated, exacerbated by the Russia-Ukraine war and unfavorable weather conditions. The company has taken necessary actions to preserve the competitiveness of its businesses to improve cash flow amid the inflationary environment.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

The consensus estimate has shifted -78.13% due to these changes.

VGM Scores

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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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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