| Century Aluminum (CENX): A Look at This Earnings Season | |
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Century Aluminum Co. CENX is scheduled to report third-quarter 2015 results after the closing bell on Oct 29. In the last quarter, this aluminum company had delivered a negative earnings surprise of 26.47%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Century Aluminum recorded a net loss of $33.9 million in second-quarter 2015 compared to net income of $20.3 million in the year-ago quarter. Costs associated with the labor disruption at the Hawesville plant negatively impacted the company’s earnings by $11.7 million in the second quarter. Along with charges related to labor disruption, Century Aluminum recorded an impairment charge of $30.9 million associated with the closure of its Ravenswood smelter in the quarter.
Century Aluminum expects challenging market conditions to persist. The company is plagued with plunging aluminum prices stemming from a strengthening U.S. dollar. However, the company believes that China is the prime factor weighing on aluminum prices. Aluminum consumption has been slowing in the nation, given the overinvestment by Chinese producers in several aluminum projects. Also, the primary aluminum sector in China is heavily subsidized, encouraging significant exports from the country.
Moreover, excessive supply and weak demand, along with a significant increase in the exports of both prime and semi-fabricated products are some major concerns for the company.
In Sep 2015, Century Aluminum’s fully owned subsidiary – Century Aluminum of Kentucky –announced the curtailment of one potline at its Hawesville, KY aluminum smelter. Hawesville's primary aluminum production will now be about 60% of capacity.
Before the shutdown, the plant operated at around 80% of capacity. The company earlier announced its plans to shut the smelter entirely from Oct 24, 2015. The company’s decision was based on a significant decline in aluminum prices owing to unfair trade practices. Overcapacity in China and the improper export of heavily subsidized Chinese aluminum products primarily resulted in the closure of the plant.
Earnings Whispers
Our proven model shows that Century Aluminum is unlikely to beat estimates this quarter. This is because the stock has a negative Earnings ESP and an unfavorable Zacks Rank.
Zacks ESP: Earnings ESP for Century Aluminum is currently -7.69%. This is because the Most Accurate Estimate is at a loss of 28 cents, while the Zacks Consensus Estimate is pegged at a loss of 26 cents.
Zacks Rank: Century Aluminum has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the announcement of results, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the basic materials sector you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Pan American Silver Corp. PAAS has an Earnings ESP of +27.27% and a Zacks Rank #3 (Hold).
Franco-Nevada Corp. FNV has an Earnings ESP of +7.69% and a Zacks Rank #3.
Koppers Holdings Inc. KOP has an Earnings ESP of +3.08% and a Zacks Rank #2 (Buy).
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Century Aluminum is a producing company based in United states of america. Century Aluminum is listed in United States of America. Its market capitalisation is US$ 1.1 billions as of today (€ 1.0 billions). Its stock quote reached its lowest recent point on March 06, 2009 at US$ 1.06, and its highest recent level on September 12, 2024 at US$ 13.04. Century Aluminum has 87 260 000 shares outstanding. |