Century (CENX) Down 45.3% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Century Aluminum (CENX). Shares have lost about 45.3% 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's Q4 Earnings and Sales Top Estimates

Century Aluminum reported net loss of $4.8 million or 5 cents per share in fourth-quarter 2019, narrower than a net loss of $65 million or 74 cents in the year-ago quarter.

Barring one-time items, adjusted loss per share were 9 cents, narrower than the Zacks Consensus Estimate of a loss of 14 cents.

Revenues and Shipments

The company generated revenues of $435.5 million in the fourth quarter, down 10.6% year over year. Nevertheless, the figure beat the Zacks Consensus Estimate of $416.8 million.

Shipments of primary aluminum were 202,870 tons, up 7.3% year over year. The upside reflects the impact of the ongoing Hawesville restart project.

2019 Highlights

In 2019, adjusted loss came in at $129.2 million or $1.35 per share, which was wider than adjusted loss of $13 million or 14 cents a year ago.

Net sales declined 3% year over year to $1,836.6 million. Total shipments rose 8.2% year over year to 811,244 tons.

Financials

At the end of 2019, the company had cash and cash equivalents of $38.9 million, flat year over year.

Net cash provided by operating activities was $17.7 million during 2019.

Outlook

The company stated that the external environment improved heading into 2020. It has started to witness a pickup in industrial activities across several key global markets. Moreover, the recently-signed U.S.-China trade agreement is expected to support these trends.

The coronavirus outbreak has put pressure on the market price of industrial commodities by affecting global economic activity. Input cost trends have moved uniformly in the company’s favor. Moreover, alumina prices have settled at normalized levels while carbon prices have continued to decline.

Century Aluminum is exposed to power prices in the United States and Europe. Power prices have seen a declining trend suggesting persistent decrease in the cost of power generation.

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 50% due to these changes.

VGM Scores

At this time, Century has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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.