Shares of London-based silicon metal maker Ferroglobe PLC (NASDAQ:GSM) are hopping this morning, up 17% as of 12:20 p.m. EDT. But why?
Although it's currently earnings season, it's not "earnings" news that's moving Ferroglobe shares -- or not exactly. Although Ferroglobe put out a press release on the subject of earnings this morning, it was only to say that second-quarter 2018 earnings will be released a week from now, on the morning of Aug. 22, 2018.
What are investors expecting Ferroglobe to report, and could this be what's driving the shares higher today?
According to Yahoo! Finance figures, analysts are expecting Ferroglobe to report profits per share of $0.21 on sales of $615.7 million when earnings come out next week. This would represent a 45% jump in quarterly sales for Ferroglobe -- and a quadrupling of profits in comparison to last year's Q2, which would obviously be a good reason to get excited.
Earnings per share could potentially jump even more in the quarter ahead as well. This is because two days ago Ferroglobe won approval from its shareholders to begin buying back stock "off market." The actual number of shares it will repurchase and when it will buy them back and at what price remain undetermined, but Ferroglobe management says it could potentially buy as many as 10% of its shares outstanding.
Any such repurchases won't happen in time to affect Q2 results, which closed at the end of June. But by cutting the share count, they could concentrate whatever profits Ferroglobe earns in Q3 among fewer shares outstanding, thus boosting earnings per share substantially. If that shows up in Ferroglobe's guidance next week, it could prove investors right to have bid up its stock so much today.