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Ferroglobe Stock Crashes on Earnings Results

By Tyler Crowe - Mar 2, 2021 at 2:26PM

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Lower production volumes and weaker commodity prices hit the silicon miner hard in 2020. Will it turn things around in 2021?

What happened

Shares of miner Ferroglobe (GSM 0.41%) were down 14.3% as of 1:45 p.m. EST today. The big price drop comes after the company released earnings results that weren't up to investor expectations.

So what

Let's start with the fact that Ferroglobe's stock is already very volatile, and sometimes the stock can move more than 5% to 10% in a given day with no news at all. So a drop this big isn't completely out of the blue.

an excavator in a pit mine.

Image source: Getty Images.

The small-cap miner reported a per-share loss for the fourth quarter of $0.49, with a per-share loss for full-year 2020 of $1.13. Revenue for the year was down 28% to $1.14 billion. That decline was a combination of lower sales volumes from COVID-related shutdowns and slightly lower prices for silicon metal, silicon-based alloys, and manganese-based alloys.

Now what

Shares of Ferroglobe have been on a tear lately, surging more than 580% over the past six months, so there is a lot of optimism baked into this stock. Keep in mind that the company has struggled to maintain profitability since it went public. Perhaps with coronavirus tailwinds easing, it will be able to get back to pre-pandemic production.

But whether that turns it into a consistently profitable company remains to be seen, and the price for that turnaround is pretty high right now. So for now, it may be best to sit on the sidelines.

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Ferroglobe PLC Stock Quote
Ferroglobe PLC
GSM
$7.39 (0.41%) $0.03

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