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Century (CENX) Up 15.4% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Century Aluminum (CENX - Free Report) . Shares have added about 15.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Century due for a pullback? 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 Q2 Earnings & Revenues Miss Estimates

Century Aluminum reported net loss of $35.1 million or 39 cents per share in second-quarter 2021, wider than the net loss of $26.9 million or 30 cents per share in the year-ago quarter. The bottom line in the reported quarter was affected by $7.8 million of exceptional items.

Barring one-time items, adjusted loss was 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 22 cents per share.

Revenues and Shipments

The company generated net sales of $528 million in the second quarter, climbing 31.4% year over year from $401.9 million. The top line, however, missed the Zacks Consensus Estimate of $559.3 million. Net sales increased around 19% sequentially on higher aluminum prices and increased regional premiums.

Shipments of primary aluminum were 190,894 tons, down 9.2% year over year and 2% sequentially due to disruptions in the supply chain that delayed the pace of restart activities at Mt. Holly.

Financials

At the end of the quarter, the company had cash and cash equivalents of $9 million, down 94.8% year over year.

Net cash used in operating activities was $87.9 million in the six months ended Jun 30, 2021.

Outlook

Century Aluminum stated that on the back of continued strength in global aluminum markets, it is focused on adding more production online through its previously announced expansion project at Mt. Holly and a return to targeted production levels at Hawesville. It expects both the projects to be completed by the year end, which will provide the much-needed additional units to the marketplace as well as additional LME and regional premium pricing exposure.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -93.02% due to these changes.

VGM Scores

At this time, Century has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Century has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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