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Ferroglobe (GSM) Earnings Miss Estimates in Q3, Increase Y/Y

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Ferroglobe (GSM - Free Report) reported adjusted earnings per share of 64 cents in third-quarter 2022, which missed the Zacks Consensus Estimate of 68 cents. The company had reported a loss of 36 cents per share in the prior-year quarter. The cost cutting initiatives implemented by the company over the past few years led to improved performance in earnings in the quarter.

Including one-time items, the company reported earnings of 52 cents per share in the third quarter against the loss of 54 cents in the year-ago quarter.

GSM’s revenues surged 38% year over year to $593 million in the quarter under review. However, the top line missed the Zacks Consensus Estimate of $695 million.

Ferroglobe PLC Price, Consensus and EPS Surprise

Ferroglobe PLC Price, Consensus and EPS Surprise

Ferroglobe PLC price-consensus-eps-surprise-chart | Ferroglobe PLC Quote

Silicon metal revenue in the third quarter was $263.8 million, up 73.3% from the prior-year’s third quarter. The average realized selling price rose 111.6% while total shipments decreased by 18%, on a year-over-year basis.

Silicon-based alloy revenue in the third quarter was $179.0 million, up 61% year over year. The average realized selling price increased 83.5% year over year and total shipments of silicon-based alloys decreased 12.3% from the third quarter of 2021.

Manganese-based alloy revenue in the third quarter was $97.5 million, down 19% from the last year’s comparable quarter. The average realized selling price rose 0.6% year over year and total shipments decreased 19.5%.

Operational Update

Raw materials and energy consumption for production was $285 million in the third quarter of 2022, down 3.4% year over year.

Operating profit was $154 million in the quarter, a solid 1,271% rise from $11.3 million in the prior-year quarter. Adjusted EBITDA was $185.3 million compared with $37.6 million in the year-ago quarter. The adjusted EBITDA margin was 31.2% in the quarter under review compared with 8.8% in the prior year’s third quarter.

Financial Position

Ferroglobe ended the third quarter of 2022 with $237 million of cash in hand, down from the $306.5 million at end of the second quarter of 2022. Cash flow from operations during the quarter was $55 million. During the quarter the company redeemed $60 million of its 9% super senior secured notes. This action has lowered its annual interest expense by over $5 million.

Price Performance

Zacks Investment Research
Image Source: Zacks Investment Research

Ferroglobe’s shares have declined 5.2% over the past year, compared with the industry’s fall of 1.2%.

Zacks Rank & Stocks to Consider

Ferroglobe currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Commercial Metals Company (CMC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) . While SQM and CMC sport a Zacks Rank #1 (Strong Buy), RS carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sociedad has a projected earnings growth rate of 538.1% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.2% upward in the past 60 days.

Sociedad has a trailing four-quarter earnings surprise of roughly 27.2%. SQM has rallied around 60% in a year.

The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days. Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters.

CMC has a trailing four-quarter earnings surprise of roughly 19.7%, on average. The company’s shares have gained around 38% in a year.

Reliance Steel has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.

Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 23% in a year.

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