Ferroglobe (NASDAQ:GSM) Shares Down 15.3% Following Weak Earnings

Key Points

• Ferroglobe shares fell 15.3% after quarterly results missed expectations: the company reported a $0.06 per-share loss versus the $0.04 loss analysts expected, while revenue of $369.8 million came in below the $382.8 million consensus.
• Higher energy costs pressured results, contributing to adjusted EBITDA of negative $2.4 million. Management is targeting about $100 million in adjusted EBITDA improvement at full run rate through plant closures, higher utilization, and overhead cuts.
• The company declared a quarterly dividend of $0.015 per share, equivalent to $0.06 annually; it is payable December 30 to shareholders of record December 22.

Ferroglobe PLC (NASDAQ:GSM - Get Free Report) shares were down 15.3% during trading on Wednesday following a weaker than expected earnings announcement. The company traded as low as $3.35 and last traded at $3.27. Approximately 1,150,597 shares changed hands during mid-day trading, a decline of 17% from the average daily volume of 1,389,597 shares. The stock had previously closed at $3.86.

The basic materials company reported ($0.06) earnings per share for the quarter, missing the consensus estimate of ($0.04) by ($0.02). The company had revenue of $369.76 million for the quarter, compared to the consensus estimate of $382.80 million. Ferroglobe had a negative net margin of 2.96% and a negative return on equity of 3.73%.

Ferroglobe Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, December 30th. Shareholders of record on Tuesday, December 22nd will be paid a dividend of $0.0150 per share. This represents a $0.06 annualized dividend and a yield of 1.8%. The ex-dividend date of this dividend is Tuesday, December 22nd. Ferroglobe's payout ratio is presently -27.27%.

Key Stories Impacting Ferroglobe

Here are the key news stories impacting Ferroglobe this week:

• Positive Sentiment: Management is targeting a roughly $100 million (±15%) improvement in adjusted EBITDA at full run rate through higher capacity utilization and lower overhead. The plan includes five plant closures and a 20% overhead reduction, which could improve profitability if executed successfully. Ferroglobe plans five plant closures and overhead cuts
• Positive Sentiment: The company announced a quarterly dividend of $0.015 per share, payable December 30, equivalent to $0.06 annually and an indicated yield of about 1.7%.
• Positive Sentiment: Ferroglobe reported $25.9 million in operating cash flow and $5.6 million in free cash flow, helped by a reduction in working capital. It also made initial customer shipments tied to strategic critical-materials initiatives. Third-quarter results and profitability actions
• Neutral Sentiment: Chief Legal Officer and Group Company Secretary Thomas Wiesner is stepping down effective November 4. The announcement did not state a reason or identify an immediate financial impact. Wiesner steps down
• Negative Sentiment: Q3 adjusted EBITDA was negative $2.4 million as higher energy prices reduced EBITDA by nearly $19 million. Revenue of $369.8 million rose 18.6% year over year but fell short of analyst expectations; the reported loss of $0.06 per share also missed consensus. These results likely weigh on sentiment and highlight near-term cost pressures. Q3 loss and revenue miss

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on GSM. Wall Street Zen upgraded shares of Ferroglobe from a "hold" rating to a "buy" rating in a report on Saturday, October 10th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Ferroglobe in a report on Monday. One investment analyst has rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $6.00.

Insiders Place Their Bets

In related news, insider Cos Muntanola Beatriz Garcia sold 32,292 shares of Ferroglobe stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $4.30, for a total transaction of $138,855.60. Following the completion of the sale, the insider owned 31,693 shares in the company, valued at $136,279.90. This trade represents a 50.47% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. 13.07% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Ferroglobe

Hedge funds have recently modified their holdings of the business. Donald Smith & CO. Inc. purchased a new stake in Ferroglobe in the second quarter valued at $25,843,000. Bastion Asset Management Inc. purchased a new position in shares of Ferroglobe during the 1st quarter valued at about $4,155,000. Sei Investments Co. raised its stake in shares of Ferroglobe by 67.0% during the 1st quarter. Sei Investments Co. now owns 639,440 shares of the basic materials company's stock valued at $2,634,000 after buying an additional 256,449 shares during the last quarter. Public Employees Retirement System of Ohio purchased a new position in shares of Ferroglobe during the 2nd quarter valued at about $544,000. Finally, SummerHaven Investment Management LLC acquired a new position in shares of Ferroglobe in the 3rd quarter valued at about $530,000. Hedge funds and other institutional investors own 89.64% of the company's stock.

Ferroglobe Trading Down 15.3%

The company has a current ratio of 1.29, a quick ratio of 0.74 and a debt-to-equity ratio of 0.06. The firm has a market cap of $610.28 million, a price-to-earnings ratio of -14.93 and a beta of 1.21. The company has a fifty day moving average price of $4.16 and a 200-day moving average price of $4.22.

About Ferroglobe

Ferroglobe PLC NASDAQ: GSM is a global producer of silicon and manganese-based alloys. The company manufactures silicon metal, ferrosilicon, manganese alloys, calcium silicon and other specialty alloy products used in the production of steel, aluminum, silicones, solar materials and other industrial goods.

Ferroglobe also operates quartz resources and produces related raw materials used in its alloy manufacturing processes. Its products support several industries, including automotive, construction, energy, chemicals, electronics and renewable energy.

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