Ferroglobe (NASDAQ:GSM) Shares Gap Down on Disappointing Earnings

Key Points

• Ferroglobe PLC shares gapped down significantly, opening at $3.61 after closing at $4.04, following a disappointing earnings report with an EPS of ($0.08) that missed analysts' expectations.
• The company reported revenue of $386.86 million for the quarter, below the expected $398 million, resulting in a negative net margin of 3.80% despite a positive return on equity of 1.93%.
• In reaction to the earnings results, Wall Street Zen upgraded Ferroglobe's rating from "sell" to "hold," indicating a shift in analysts' outlook on the stock.

Ferroglobe PLC (NASDAQ:GSM - Get Free Report)'s stock price gapped down prior to trading on Wednesday following a weaker than expected earnings announcement. The stock had previously closed at $4.04, but opened at $3.61. Ferroglobe shares last traded at $4.43, with a volume of 476,476 shares changing hands.

The basic materials company reported ($0.08) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.02) by ($0.06). Ferroglobe had a negative net margin of 6.99% and a negative return on equity of 2.85%. The firm had revenue of $386.86 million during the quarter, compared to analyst estimates of $398.00 million.

Ferroglobe Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Monday, September 29th. Investors of record on Monday, September 22nd will be paid a $0.014 dividend. This represents a $0.06 annualized dividend and a dividend yield of 1.4%. The ex-dividend date is Monday, September 22nd. Ferroglobe's payout ratio is currently -10.53%.

Analyst Upgrades and Downgrades

Separately, Wall Street Zen cut shares of Ferroglobe from a "hold" rating to a "sell" rating in a research note on Saturday.

Hedge Funds Weigh In On Ferroglobe

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Heck Capital Advisors LLC acquired a new stake in shares of Ferroglobe in the fourth quarter valued at about $37,000. Creative Financial Designs Inc. ADV acquired a new stake in shares of Ferroglobe in the first quarter valued at about $37,000. PNC Financial Services Group Inc. acquired a new stake in shares of Ferroglobe in the first quarter valued at about $38,000. R Squared Ltd acquired a new stake in shares of Ferroglobe in the second quarter valued at about $38,000. Finally, Raymond James Financial Inc. acquired a new stake in shares of Ferroglobe in the fourth quarter valued at about $42,000. 89.64% of the stock is owned by hedge funds and other institutional investors.

Ferroglobe Price Performance

The stock's 50-day moving average price is $4.13 and its 200 day moving average price is $3.86. The firm has a market capitalization of $755.85 million, a price-to-earnings ratio of -7.11 and a beta of 1.62. The company has a quick ratio of 1.00, a current ratio of 1.56 and a debt-to-equity ratio of 0.14.

Ferroglobe Company Profile

Ferroglobe PLC produces and sells silicon metal, and silicon and manganese-based ferroalloys in the United States, Europe, and internationally. It provides silicone chemicals that are used in a range of applications, including personal care items, construction-related products, health care products, and electronics; and silicon metal for primary and secondary aluminum producers.