Century Aluminum Earnings Preview

Investors never know what to expect for Century Aluminum (Nasdaq: CENX  ) , as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Thursday, Feb. 23. Century Aluminum produces primary aluminum, which is an internationally traded commodity. The company's primary aluminum facilities produce value-added and standard-grade primary aluminum products.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Century Aluminum with six of nine analysts rating it hold. Analysts don't like Century Aluminum as much as competitor Kaiser Aluminum overall. Four out of six analysts rate Kaiser Aluminum a buy compared to one of nine for Century Aluminum.
  • Revenue forecasts: On average, analysts predict $317.3 million in revenue this quarter. That would represent a rise of 0.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.25 per share. Estimates range from a loss of $0.33 to a loss of $0.10.

What our community says:
CAPS All-Stars are solidly behind the stock, with 95.6% giving it an "outperform" rating. The greater community is in line with the All-Stars, as 90.2% give it a rating of "outperform." Fools are bullish on Century Aluminum, though the message boards have been quiet lately with only one post in the past 30 days. Despite the majority sentiment in favor of Century Aluminum, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's gross margin shrank by 2.4 percentage points in the last quarter. Revenue rose 23.8% while cost of sales rose 26.9% to $334.3 million from a year earlier.

Now, a look at how efficient management has been at running the business. Margins are a representation of how efficiently a company captures portions of sales dollars. Century Aluminum has seen increasing net margin year over year for the last four quarters. Net margin reflects what percentage of each dollar earned by the company becomes profit. Here are Century Aluminum's reported margins for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

3.3%

13.5%

13.0%

13.0%

Operating Margin

0.2%

9.9%

11.5%

25.1%

Net Margin

(1.9%)

6.5%

7.7%

20.6%

One final thing: If you want to keep tabs on Century Aluminum movements, and for more analysis on the company, make sure you add it to your Watchlist.

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Earnings estimates provided by Zacks.

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