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TheStreet Open House

Century Aluminum (CENX) Falls Despite Earnings Beat

NEW YORK (TheStreet) -- Century Aluminum  (CENX) fell 5.84% to $11.45 at the close of the trading day on Friday, down 71 cents from its previous close of $12.16, despite the fact that the company reported fourth-quarter earnings that surpassed analysts' expectations.

The company reported a net loss of $9.7 million, or 11 cents a share, wider than $6.9 million, or 8 cents a share, in the same period one year ago. Fourth-quarter revenue was $401.17 million, up year-over-year from $317.67 million. Analysts polled by Thomson Reuters expected a loss of 22 cents a share on revenue of $400.29 million.

Barclays also raised its target price on the stock to $13 from $11.

The stock had a high of $12.11 and a low of $11.12 for the day and amassed a volume of 2,039,093, well above its average of 665,531. It holds a one-year high of $12.58 and a one-year low of $6.26.

TheStreet Ratings team rates CENTURY ALUMINUM CO as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CENTURY ALUMINUM CO (CENX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins, weak operating cash flow and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues rose by 31.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • CENX's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
  • Net operating cash flow has decreased to $19.48 million or 14.17% when compared to the same quarter last year. Despite a decrease in cash flow CENTURY ALUMINUM CO is still fairing well by exceeding its industry average cash flow growth rate of -33.83%.
  • The gross profit margin for CENTURY ALUMINUM CO is currently extremely low, coming in at 8.07%. Regardless of CENX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CENX's net profit margin of -2.37% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: CENX Ratings Report

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