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Century Aluminum (CENX) Tops Q2 Earnings & Sales Estimates

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Century Aluminum Company (CENX - Free Report) posted net income of $19.4 million or 20 cents per share in second-quarter 2018 compared with $7.1 million or 7 cents in the year-ago quarter. Results in the reported quarter were negatively impacted by $8.5 million from equipment failure at Sebree and expenses of $3 million associated with the Hawesville restart project.

Barring one-time items, adjusted earnings came in at 32 cents per share in the quarter, which beat the Zacks Consensus Estimate of 24 cents.

Century Aluminum Company Price, Consensus and EPS Surprise

 

Century Aluminum Company Price, Consensus and EPS Surprise | Century Aluminum Company Quote

Revenues and Shipments

The company registered revenues of $470 million in the reported quarter, up around 20.9% year over year. The figure beat the Zacks Consensus Estimate of $458.9 million. Shipments of primary aluminum in the quarter were 180,220 tons, down 1.4% from 182,829 tons shipped in the year-ago quarter.    

Financials

As of Jun 30, 2018, the company had cash and cash equivalents of $124 million compared with $131.5 million in the year-ago period. Net cash used in operating activities for the quarter was $30.4 million.

Outlook

Century Aluminum stated that downstream demand in most regions and sectors, particularly in the United States continues to be strong. This is helping to generate attractive growth in the primary metal consumption. The Section 232 relief implemented by President Trump has resulted in considerable investment in the primary industry, the company noted. It expects the U.S. primary aluminum production to increase roughly 60% year over year by the end of 2018.  
 
The company sees attractive trading conditions amid recent pricing volatility. Prices of alumina are well above the fundamentally supported level, thanks to short-term concerns over actual and potential supply disruptions. Alumina prices have weakened in the past two months, but the trend is expected to reverse, per the company.

Century Aluminum is also on track to restart its idled capacity. It has started energizing cells in first of the three curtailed potlines at Hawesville in June and is rebuilding cells in the other two lines. Moreover, the restart project is within budget and on schedule. The company has also prepared the potline at Sebree for restart after power equipment failure in late May. It expects the process to be completed by the end of third-quarter 2018.

Price Performance

Century Aluminum’s shares have lost 20.1% over the past three months compared with the 13.4% rise of the industry.

Zacks Rank & Stocks to Consider

Century Aluminum currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks worth considering in the same sector are W.W. Grainger, Inc (GWW - Free Report) , Chart Industries, Inc (GTLS - Free Report) and iRobot Corporation (IRBT - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Grainger has a long-term earnings growth rate of 12.5%. The stock has returned 100.2% in a year’s time.

Chart Industries has a long-term earnings growth rate of 26.9%. The company’s shares have surged 127.3% in a year.

iRobot has a long-term earnings growth rate of 19.5%. Its shares have rallied 36.6% in the past three months.

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