What happened

Shares of metals maker Century Aluminum (CENX -2.24%) are down 11% as of 12:50 p.m. EDT. But here's the thing: While this is "earnings season," a time of year we've been trained to expect to see big rises (and falls) in our stocks, Century Aluminum hasn't reported earnings yet. In fact, it's not expected to report earnings until April 30.

Unfortunately, while Century hasn't yet reported, Alcoa (AA) just did -- and it seems that Alcoa's bad news is turning out to be even worse news for Century.

Rolled aluminum

Image source: Getty Images.

So what

Alcoa reported its fiscal Q1 2019 earnings on Wednesday. The company did $2.72 billion in sales, coming within a whisker of Wall Street's expected sales number. Problem was, Alcoa didn't earn any profits on these sales. Instead, it reported a loss of $199 million, or $1.07 per share.

Adjusted for what it says were one-time items, Alcoa's quarterly loss would have been only $0.23 per share (still significantly worse than the $0.77-per-share profit it earned in the year-ago period). Analysts had expected a $0.13-per-share loss for this quarter.

Investors were understandably disappointed.

Now what

What's curious is that investors are taking out their disappointment disproportionately on Century Aluminum stock (down 11%) rather than on Alcoa itself (down less than 4%)!

Why might that be? Alcoa CEO Roy Harvey noted that Alcoa "improved our operations in the first quarter, even as alumina and aluminum prices weakened." He also noted that the company generated $99 million in positive free cash flow in Q1, a big improvement over the negative $19 million in free cash flow Alcoa reported in Q1 2018.

And here's the thing: Alcoa has found a way to generate positive free cash flow even in a time of "weakened" aluminum prices. Century Aluminum, on the other hand, reported negative free cash flow last year -- and may yet report more of the same when its earnings come out later this month. Until it disproves that theory, metals investors are likely to prefer the aluminum stock that's generating cash profits over the one that isn't (yet).