What happened

Shares of metals-maker Century Aluminum (NASDAQ:CENX) popped 20% in early trading Friday, just a few hours after reporting its fiscal Q1 2020 earnings Thursday evening.

Unfortunately, just a few hours into the trading day Friday, Century Aluminum had given back most of its gains, and was up only 5.6% as of 2:05 p.m. EDT.

Solid rolls of aluminum stacked up under a blue sky

Solid rolls of aluminum. Image source: Getty Images.

So what

Which is not to say that a 5.6% gain is nothing. It's just not as good as it might have been. 

In last night's report, Century said it earned $0.01 per diluted share (pro forma) instead of the $0.09-per-share loss that Wall Street had predicted. Profits eclipsed estimates despite sales of $421.2 million falling somewhat short of the $421.6 million that analysts had forecast. (Sales also declined 14% year over year.)  

But there was good news: Although Century Aluminum sold $490 million in goods during last year's first quarter, it spent $503 million on raw materials alone, resulting in a loss a year ago. This time around, Century sold only $421.2 million worth of aluminum, but its cost of goods sold was $416.4 million, yielding a gross profit for the company.  

Thus, while the company ended the quarter with a GAAP net loss (only the pro forma number was a profit), at least the loss was slimmer than last year's: $0.03 per diluted share instead of $0.39.

Now what

And that left investors with a so-so quarter. On the one hand, the company reported a pro forma profit. On the other hand, it still had a GAAP loss. But with the loss being smaller than last year's, and ahead of expectations to boot, the net result is a win for Century Aluminum.

Which is why the stock started the day up 20%, then lost most of that, but was still up 5% later in the afternoon.

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