What happened

Shares of Century Aluminum (CENX 3.87%) rose sharply in morning trading on Aug. 10, gaining 17.5% by roughly 11:15 a.m. ET. The company reported second-quarter 2022 earnings after the close on Aug. 9, which would normally be the go-to explanation for the move. Only that doesn't seem to really track this time around.

So what

On the top line, Century Aluminum reported revenue of $856.6 million, up 14% from the $753.6 million it earned in the first quarter of the year. Volumes were roughly flat, but higher selling prices were a clear tailwind. The problem is that the aluminum company experienced sharply higher costs, thanks to the inflationary environment today. Rising energy prices were specifically noted. That led to a sizable sequential decline on the bottom line, with second-quarter adjusted earnings tallying up to $0.30 per share, down from $0.59 just one quarter earlier. Wall Street was looking for $0.71, making this a fairly large miss.

The stock went up anyway. There are likely a few reasons for that. First, the broader market was in rally mode this morning. A rising tide can end up lifting all boats, even ones that report weak earnings. Second, aluminum prices were higher. Thus, most major aluminum stocks rose and Century Aluminum didn't buck that trend. And, third, there was positive inflation news out of the United States, suggesting that the rising costs that were a headwind in the second quarter might not be as big a problem in the future. It's understandable that investors would see that as a positive here given the energy intensity of aluminum production.

Now what

At the end of the day, the thing to remember about Century Aluminum is that it operates in a commodity business that is prone to dramatic, and sometimes swift, price swings. So you shouldn't read too much into one day's performance. Still, today anyway, it looks like investors were willing to look on the bright side despite a less-than-stellar quarterly performance.