Century Aluminum (NASDAQ:CENX) Announces Earnings Results, Misses Estimates By $0.09 EPS

Key Points

• Century Aluminum’s adjusted EPS was $2.58, missing the $2.67 analyst estimate by $0.09, with power and operating costs weighing on results.
• Revenue rose 52% year over year to $961.2 million, topping estimates, while shipments increased about 33% sequentially as smelter operations recovered.
• Management forecast fourth-quarter adjusted EBITDA of $275 million to $300 million, below the third quarter’s $332 million, citing lower expected realized prices.

Century Aluminum (NASDAQ:CENX - Get Free Report) released its quarterly earnings results on Thursday. The industrial products company reported $2.58 EPS for the quarter, missing analysts' consensus estimates of $2.67 by ($0.09), FiscalAI reports. Century Aluminum had a return on equity of 33.83% and a net margin of 22.63%. The business had revenue of $961.20 million for the quarter, compared to the consensus estimate of $951.71 million. During the same period in the prior year, the business posted $0.56 earnings per share. Century Aluminum's revenue was up 52.0% compared to the same quarter last year.

Here are the key takeaways from Century Aluminum's conference call:

• Positive Sentiment: Century reported nearly $1 billion in third-quarter sales and $332 million in adjusted EBITDA, while ending the quarter with $755 million in cash, more cash than debt, and over $1 billion in liquidity.
• Neutral Sentiment: Shipments rose 33% sequentially as Mt. Holly returned to full capacity and Grundartangi restarted Potline 2. Mt. Holly is expected to reach full volume during Q4, Grundartangi expects to restore full amperage in Q1, while Jamalco continues to address bauxite quality issues.
• Positive Sentiment: Management described aluminum markets as robust, citing constrained supply, strong U.S. and European demand, and historically low global inventories. It said demand is supported by data-center and power-system investment, automotive, aerospace, and defense.
• Negative Sentiment: Century forecasts fourth-quarter adjusted EBITDA of $275 million to $300 million, below Q3's $332 million, with lower expected realized pricing projected to reduce EBITDA by $35 million to $45 million sequentially.
• Neutral Sentiment: The Oklahoma smelter project advanced on financing, power-contract discussions, and engineering, but community and regulatory engagement continues and FID has not yet been reached. Management said it plans to defer shareholder returns until FID clarifies the project's funding needs.

Century Aluminum Price Performance

CENX traded up $3.40 on Friday, hitting $33.47. 3,257,735 shares of the stock were exchanged, compared to its average volume of 2,139,764. The firm has a market capitalization of $3.31 billion, a price-to-earnings ratio of 3.92 and a beta of 2.17. The company has a debt-to-equity ratio of 0.31, a current ratio of 2.75 and a quick ratio of 1.61. Century Aluminum has a 12 month low of $25.40 and a 12 month high of $70.43. The business has a 50-day moving average of $37.87 and a two-hundred day moving average of $49.41.

Key Stories Impacting Century Aluminum

Here are the key news stories impacting Century Aluminum this week:

• Positive Sentiment: Shipments rose about 33% sequentially to 173,483 tonnes, aided by the restart of the company’s Iceland smelter. Revenue increased 52% year over year to $961.2 million, while reported diluted EPS was $2.89, up from $0.56 a year earlier. Century Aluminum Q3 results
• Positive Sentiment: Quarterly revenue exceeded analyst estimates, and the production recovery could support further sales growth if operating conditions remain favorable. Iceland smelter restart and Q3 performance
• Neutral Sentiment: Wells Fargo lowered its price target from $79 to $71 but kept an Overweight rating, indicating continued optimism despite a more cautious valuation. Wells Fargo rating and target
• Negative Sentiment: Adjusted EPS was $2.58, below the cited analyst consensus of $2.67. Reports attributed pressure to power and operating costs, tempering the strong shipment and revenue figures. Q3 results and cost pressures

Analysts Set New Price Targets

Several brokerages have recently commented on CENX. Wall Street Zen cut shares of Century Aluminum from a "strong-buy" rating to a "buy" rating in a report on Sunday, September 20th. Barclays began coverage on Century Aluminum in a research note on Wednesday, October 14th. They issued an "equal weight" rating and a $40.00 price target for the company. Wells Fargo & Company reduced their price target on Century Aluminum from $79.00 to $71.00 and set an "overweight" rating on the stock in a research report on Friday. UBS Group reduced their price target on Century Aluminum from $60.00 to $55.00 and set a "buy" rating on the stock in a research report on Thursday, October 8th. Finally, Weiss Ratings restated a "hold (c+)" rating on shares of Century Aluminum in a research note on Monday, October 19th. Four research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company's stock. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average price target of $61.00.

About Century Aluminum

Century Aluminum Company is a producer of primary aluminum. The company operates aluminum smelters that convert alumina into aluminum metal, supplying standard-grade and value-added products used in transportation, construction, packaging, aerospace, and other industrial applications.

Century Aluminum's operations are located in the United States and Iceland. Its U.S. facilities include the Sebree smelter in Kentucky and the Mt. Holly smelter in South Carolina, while its Icelandic operations are based at the Grundartangi aluminum smelter.

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