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Century Aluminum (CENX) Q3 Earnings Beat, Sales Lag Estimates

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Century Aluminum Company (CENX - Free Report) reported a net loss of $52.4 million or 58 cents per share in third-quarter 2021, narrower than a loss of $58.2 million or 65 cents per share in the year-ago quarter. The bottom line in the reported quarter was affected by $46.7 million of exceptional items.

Barring one-time items, the adjusted loss was 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 10 cents.

Century Aluminum Company Price, Consensus and EPS Surprise

Century Aluminum Company Price, Consensus and EPS Surprise

Century Aluminum Company price-consensus-eps-surprise-chart | Century Aluminum Company Quote

Revenues and Shipments

The company generated net sales of $581.4 million in the third quarter, climbing 48% year over year from $392.9 million. The top line, however, missed the Zacks Consensus Estimate of $602.9 million. Net sales in the third quarter of 2021 increased around 10% sequentially due to higher aluminum prices and a rise in regional premiums.

Shipments of primary aluminum were 196,095 tons, down 3.4% year over year but up 3% sequentially led by the restart project at Mt. Holly and ongoing project activity at Hawesville.

Financials

At the end of the quarter, the company had cash and cash equivalents of $57.6 million, down 29.2% year over year.

Net cash used in operating activities was $12.1 million in the nine months ended Sep 30, 2021.

Outlook

The company stated that it is on track with the progress of the expansion projects at Mt. Holly and Hawesville, and expects both 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. Also, it has started the construction of a new 150,000 ton low-carbon billet cast-house at Grundartangi. The completion of the 2-year project promises to cast over 80% of Grundartangi’s production as value-added products, further strengthening the world-class asset. The billets and other value-added products at Grundartangi will continue to be produced using 100% renewable energy, thereby expanding the company’s Natur-Al line of low-carbon products and bringing low-carbon billets to the European marketplace.

The company also noted that global energy shortages and China’s de-carbonization policies have led to production cuts in China and Europe, leading the global aluminum market into deficit and taking down aluminum inventories to multi-year lows.

Price Performance

Century Aluminum’s shares have risen 83.6% over the past year, outperforming the 26.7% rise of the industry.

Zacks Investment ResearchImage Source: Zacks Investment Research

Zacks Rank & Other Stocks to Consider

Currently, Century Aluminum carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the industrial products space include A.O. Smith Corporation (AOS - Free Report) , Alcoa Corporation (AA - Free Report) , and Brady Corporation (BRC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

A.O. Smith has a projected earnings growth rate of 35.2% for the current year. The company’s shares have grown 44.6% over the past year.

Alcoa has a projected earnings growth rate of 690.5% for the current year. The company’s shares have shot up 230% over the past year.

Brady has a projected earnings growth rate of 21.1% for the current year. The company’s shares have risen 34.4% over the past year.


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