Why Is Century (CENX) Up 37% Since Last Earnings Report?

It has been about a month since the last earnings report for Century Aluminum (CENX). Shares have added about 37% 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's Q1 Earnings & Revenues Beat Estimates

Century Aluminium reported a net loss of $2.7 million or 3 cents per share in first-quarter 2020, narrower than a net loss of $34.6 million or 39 cents per share in the year-ago quarter. The bottom line was hurt by $3.7 million of non-cash exceptional items.

Barring one-time items, adjusted earnings were a penny per share, beating the Zacks Consensus Estimate of a loss of 8 cents.

Revenues and Shipments

The company generated revenues of $421.2 million in the first quarter, down 14% year over year. Nevertheless, the figure beat the Zacks Consensus Estimate of $419 million.

Shipments of primary aluminum were 202,905 tons, down 1.7% year over year.

Financials

At the end of the quarter, the company had cash and cash equivalents of $147.6 million, up from $22.2 million a year ago.

Net cash provided by operating activities was $34.6 million during the quarter.

Outlook

Century Aluminum stated that it does not expect a build of finished goods’ inventory in the future. The company is seeing meaningful reductions in the price of key inputs, such as alumina and wholesale electric power. It also noted that it has adequate liquidity for the foreseeable future, even if commodity prices remain at current levels.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 51.22% due to these changes.

VGM Scores

At this time, Century has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Century has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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